Dear Friends & Colleagues, 

Individual Mandate (Penalty and Exemptions) Toolkit

Penalty myths abound!
  We continue to discuss the individual mandate in the Affordable Care Act (ACA) – and the associated tax penalty with our tax customers.  Many uninsured taxpayers are shocked to learn that their penalty for lacking minimum essential coverage could be a LOT more than $95 in 2014.  In fact, an taxpayers uninsured for the year would typically be about 1% of their income in penalties.  That fact runs counter to the most common perceptions about the ACA’s penalty provision.

Okay, so the penalty is complex and often misunderstood – but what about the exemptions? 
Unfortunately, HHS created about eight exemption categories– one of which could apply to individuals based on thirteen criteria with different application instructions for each – and a total of about eight different forms to consider.  To its credit, HHS drafted an explanation at, which reads at the 9.5-grade reading level.  While substantially higher than the Department’s sixth-grade target, it is a vast improvement over former drafts.  Even so, the exemptions remain frightfully difficult to explain, and HHS has created a cumbersome that taxpayers must use to apply.

Now there is a much easier way to explain the penalty and the exemptions!
  To help with this educational effort, we created the attached toolkit.  Our toolkit includes the previously-released penalty explanation, worksheet, and example – and we have added two new infographics to help explain the exemptions.  These materials are now also available at  Please feel free to use, reproduce, and/or distribute these documents as much as you like; we just ask that you do so without modifying the content or format. Of course, we also  encourage all users to discuss the results with a trained tax preparer before drawing conclusions.

The ACA is tightly linked to taxes – and we at Jackson Hewitt are focused on helping American families with this and all aspects of the tax code.  Please feel free to contact me at or 615-761-6929 if I can be helpful in any way.