7.5M U.S. Residents Paid Individual Mandate Penalty, IRS Data Show

About 7.5 million U.S. residents paid an average of $200 in penalties for failing to comply with the Affordable Care Act's individual mandate, according to preliminary data provided to Congress last week by IRS, Kaiser Health News reports.

Federal officials in January estimated that between three million and six million U.S. households would pay a penalty -- called an "individual shared responsibility payment" -- for not having coverage. In 2014, the penalty was 1% of annual income or $95 per adult, whichever is greater.

The new data -- included in a letter to lawmakers from IRS Commissioner John Koskinen, which he released early because of "numerous requests" -- show that 76% of taxpayers indicated they had coverage for the entirety of 2014. Another 5% were dependents who filed returns but were exempt from the penalty (Galewitz, Kaiser Health News, 7/21).

According to the letter:

• About 40% of the penalties were $100 or less;
• About 5% were $500 or more; and
• About 85% of taxpayers who paid penalties still received a tax refund (IRS letter, 7/17).

Meanwhile, about 300,000 taxpayers mistakenly paid a penalty. IRS is sending letters to those individuals telling them they have three years to file an amended tax return (Kaiser Health news, 7/21).