ACA employer mandate penalty 2026, 4980H(a) and (b).

The 2026 amounts

IRS Rev. Proc. 2025-26 sets the indexed dollar amounts for calendar year 2026: the $2,000 amount in section 4980H(c)(1) becomes $3,340 and the $3,000 amount in section 4980H(b)(1) becomes $5,010. Payments are calculated monthly at one-twelfth of the annual amount.

Payment (a): no offer to enough employees

Under 4980H(a), an applicable large employer that does not offer minimum essential coverage to its full-time employees and dependents for a month, and has at least one full-time employee who receives the premium tax credit, owes the applicable payment amount times the number of full-time employees for that month. The IRS explains that the first payment applies when the employer fails to offer coverage to at least 95 percent of its full-time employees and dependents. The number of full-time employees is reduced by 30 for this calculation (4980H(c)(2)(D)).

Example: 100 full-time employees, no qualifying offer for 12 months: (100 - 30) x $3,340 = $233,800.

Payment (b): coverage offered, but unaffordable or short on minimum value

If the employer offers coverage but a full-time employee receives the premium tax credit, 4980H(b) imposes 1/12 of the $5,010 amount per such employee per month. The total for any month cannot exceed the payment (a) amount for that month, which the calculator applies. Example: 10 employees for 12 months: 10 x $5,010 = $50,100.

Who is covered

Applicable large employers: on average at least 50 full-time employees, including full-time equivalents, in the preceding calendar year. Dependents here are children under 26; spouses are not counted.

What this estimate leaves out

• Transition relief and the interaction of the 95 percent offer test.
• Month-by-month headcounts that change, and controlled-group aggregation.
• Appeals through the IRS Letter 226-J process.

FAQ

What are the 2026 employer mandate penalty amounts?

$3,340 for the 4980H(a) amount and $5,010 for the 4980H(b) amount, per Rev. Proc. 2025-26.

Do I subtract 30 employees?

For payment (a) and the cap on payment (b), the number of full-time employees is reduced by 30.

Who is an applicable large employer?

An employer with an average of at least 50 full-time employees, including full-time equivalents, in the preceding calendar year.

Does payment (b) have a cap?

Yes. The total for a month cannot exceed the payment (a) amount for that month.

Is the penalty a tax deduction?

This page does not answer that question; ask a tax professional.

Who decides the amount I owe?

The IRS assesses the payment after matching your filings with employee premium tax credit data. This page is only an estimate.

Sources

Retrieved 2026-11-02. Statute and regulation text read through the eCFR API (current as of 2026-10-29) or the publisher URLs below.

• IRS, Rev. Proc. 2025-26 (2026 indexing of 4980H amounts): $3,340 and $5,010 for 2026.
• 26 U.S.C. 4980H, Shared responsibility for employers regarding health coverage: Payment (a), (b), the overall limitation and the 30-employee reduction.
• IRS, Employer shared responsibility provisions: Who is an applicable large employer and the 95 percent offer test.