What Should I Do If I Can’t Pay the ACA Penalty?


The requirement to carry minimum essential health insurance coverage came with an increasing penalty each year since the ACA was implemented in 2014. 

The IRS collects the ACA penalty as an additional tax on your return. Usually, the IRS has broad powers to collect unpaid taxes, but provisions in the Affordable Care Act (ACA) limit this. To collect the payment, the IRS can’t:

  • File criminal charges or seek a criminal penalty
  • File a notice of lien on your property
  • Levy your property

If you don’t pay the Obamacare penalty from your 2018 taxes, the IRS can collect the penalty later if, on a future return, you have any refunds or credits coming. The IRS has to notify you that it plans to do this. Interest will grow on the unpaid amount just like it would for an underpayment of tax. Due to changes in tax law, you won’t have an additional penalty for failure to have insurance for 2019, but you’ll still be on the hook for any unpaid penalties from prior years.

Need Help Understanding How the ACA Penalty and Tax Reform Affect You?

The Tax Cuts and Jobs Act includes hundreds of changes, including the change to the ACA penalty. You can learn more about how these changes could impact you in our Tax Reform Center. If you’re looking for personal assistance, you can make an appointment with your nearest H&R Block tax professional.

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