Employer shared responsibility · IRC §4980H
ACA Tax Penalty Calculator
Estimate your potential employer ACA penalty using IRS annual rates.
How to fill out this form
Follow these steps for each field. Every input is an average or a count — no employee names or personal details are needed.
- 1Tax year — choose the year you want to estimate. Penalty rates differ by year.
- 2Workforce — enter the prior-year average of full-time employees plus full-time equivalents (two half-time employees count as one). Include related employers in your controlled group. This number decides whether the 50-employee rule applies to you.
- 3Full-time employees — enter the average number of employees working 30+ hours per week during the months you are estimating. Do not include full-time equivalents here.
- 4Months — enter how many months of the year at least one full-time employee could have received a premium tax credit. For a full year, enter 12.
- 5Coverage — choose what was actually offered. “Affordable, minimum-value coverage offered” means no penalty for these months.
- 6Credit recipients — enter how many full-time employees actually received a Marketplace premium tax credit. Leave 0 if affordable, minimum-value coverage was offered.
- 7Reduction — leave 30 for a single employer. Related employers in a controlled group share the 30; enter your whole-number share.
Worked example
First-time benefits group: no medical coverage offered
An established restaurant group has never offered medical insurance. Its prior-year average workforce is 120 full-time employees plus full-time equivalents, so it meets the 50-employee applicable large employer (ALE) threshold. In 2026, it has 80 full-time employees and offers no coverage. Just one full-time employee receives a qualifying Marketplace premium tax credit during all 12 months subject to the penalty.
Tax year 2026 · Workforce 120 · Full-time 80 · Months 12 · Coverage: Below the required MEC offer threshold (no coverage) · Credit recipients 1 · Reduction 30
(80 − 30) × $3,340 = $167,000 for the year — approximately $13,916.67 per month under §4980H(a).
One qualifying credit recipient can trigger a penalty based on all 80 full-time employees, minus the 30-employee reduction — not just that one employee. The penalty is not a small fee per uninsured worker, and paying it does not provide employees with medical coverage.
Illustrative planning scenario, not an actual employer assessment. Assumes a standalone employer, constant headcount, and 12 months subject to liability after any applicable transition or limited non-assessment period. Newly qualifying employers may have a limited non-assessment period; confirm timing with your adviser. Neither employer penalty is triggered without a qualifying premium tax credit.
Estimate assumptions
Planning estimate only—not tax or legal advice or an IRS assessment. Assumes the same headcount and coverage circumstances in every selected month. Seasonal-worker exceptions, new-employer rules, limited non-assessment periods, and employee-specific affordability safe harbors are not evaluated. Confirm ALE status, credit eligibility, and controlled-group allocations with your adviser.