Five jurisdictions will charge you a tax penalty for going without health insurance: Massachusetts, California, New Jersey, Rhode Island, and the District of Columbia. Vermont has a mandate on its books but does not fine anyone who ignores it. The federal penalty under the Affordable Care Act still exists in statute, but Congress set it to $0 starting in 2019, so only these state-level rules carry a real cost. Each state collects its penalty through the state income tax return.
Massachusetts
Massachusetts has had an individual mandate since 2006 and applies the strictest standard in the country. A qualifying plan must meet the state’s minimum creditable coverage rules, which include deductible caps of $3,200 for an individual and $6,400 for a family in 2026. Some high-deductible plans that satisfy federal minimum essential coverage still fall short here.
The penalty is scaled to income using Federal Poverty Level brackets. For tax year 2026:
- At or below 150% FPL: no penalty.
- 150.1–200% FPL: $26 per month ($312 per year).
- 200.1–250% FPL: $51 per month ($612 per year).
- 250.1–300% FPL: $76 per month ($912 per year).
- 300.1–400% FPL: $117 per month ($1,404 per year).
- Above 400% FPL: $211 per month ($2,532 per year).
Married couples who both lack coverage pay the sum of their individual penalties. Massachusetts allows a 63-day gap in coverage before any penalty applies. You report your coverage on Schedule HC with your state return, and your insurer sends Form MA 1099-HC documenting the months you were covered.
California
California’s mandate took effect in 2020. You pay the higher of two calculations. For the 2025 tax year:
- Flat amount: $950 per uninsured adult and $475 per uninsured child under 18.
- Percentage of income: 2.5% of gross household income above the tax filing threshold.
A family of four uninsured all year owes at least $2,850. Penalties are prorated by month, so three months without coverage costs roughly a quarter of the annual figure. The Franchise Tax Board enforces the penalty through Form 540. Insurers and employers report coverage on federal Forms 1094-B and 1095-B, and Covered California files Form FTB 3895 for marketplace enrollees.
New Jersey
New Jersey has enforced its mandate since 2019. You owe the greater of a flat dollar amount per person or 2.5% of household income, capped at the statewide average cost of a Bronze marketplace plan. For 2025:
- Individual minimum: $695.
- Individual maximum: $4,908.
- Family of two adults and three children, income under $200,000: $2,443 to $4,500.
- Same family, income $200,001–$400,000: $2,433 to $9,500.
- Same family, income above $400,000: $2,433 to $24,540.
The wide range at higher incomes reflects the percentage-of-income calculation overtaking the flat amount. Coverage is reported on Schedule NJ-HCC, filed with Form NJ-1040. If your income falls below the state filing threshold, you are automatically exempt.
Rhode Island
Rhode Island’s mandate began in 2020 and tracks the frozen federal formula. You owe the greater of a flat dollar amount or 2.5% of your modified adjusted gross income above the filing threshold, but no more than the average cost of a Bronze plan in the state. For tax year 2025:
- Flat amount: $57.92 per month per adult ($695.04 annualized) and $28.96 per month per child under 18.
- Maximum flat penalty: $2,085.
- Bronze plan cap: $357 per month ($4,284 annualized).
You report your status on Form RI-1040 and enter any shared responsibility payment on the designated line.
District of Columbia
D.C. has required coverage since 2019. For tax year 2024, the most recently published Schedule HSR, the calculation works like this:
- Flat amount: $695 per adult and $347.50 per child under 18, with a household maximum of $2,385.
- Percentage of income: 2.5% of federal adjusted gross income minus the standard deduction.
You pay whichever figure is larger, capped at the average cost of a Bronze plan sold through DC Health Link. Residents file Schedule HSR with Form D-40. If everyone in your household had qualifying coverage all year, you check a box on page one of the D-40, enter zero, and skip Schedule HSR.
Vermont: Mandate Without a Fine
Vermont requires residents to maintain health insurance and to report coverage on the state tax return, but the state charges nothing for noncompliance. Vermont Health Connect, the state’s marketplace, states plainly: “You don’t have to pay a fine if you don’t have health coverage.” That could change, but for now the mandate carries no dollar cost.
When You Don’t Owe a Penalty
Every state with a penalty exempts people in circumstances where buying coverage would be unreasonable. The categories look similar across states, though the thresholds vary.
Income below the filing threshold. If you don’t earn enough to file a state return, you generally owe no penalty. Massachusetts goes further and exempts anyone at or below 150% of the Federal Poverty Level regardless of filing status.
Coverage is unaffordable. If the cheapest available plan would cost more than a set share of your household income, you qualify for an affordability exemption. California’s threshold for the 2025 tax year is 7.28% of household income; other states apply similar tests.
Short gap in coverage. A lapse of fewer than three consecutive months generally does not trigger a penalty. Massachusetts allows up to 63 days.
Hardship. Eviction, domestic violence, a death in the family, bankruptcy, or a natural disaster can qualify you for a hardship exemption. Most states let you claim it on the tax return, though California routes certain hardship claims through Covered California instead.
Other categories. Members of recognized religious groups that oppose insurance-based healthcare, people who were incarcerated, certain non-citizens, members of federally recognized tribes, and residents who lived abroad for most of the year are typically exempt. Documentation is filed with the state return or, in some cases, through the state marketplace or tax authority.
How to File So the Penalty Doesn’t Hit You
First, confirm your plan qualifies. Employer-sponsored insurance, marketplace plans, Medicaid, and Medicare all count in every state with a mandate. Short-term plans and health-sharing ministries generally do not, though some states treat sharing ministries as exempt rather than noncompliant. In Massachusetts, your plan must also clear the minimum creditable coverage standard.
Second, keep your coverage forms. Insurers send Form 1095-B or 1095-C showing the months you were covered. Massachusetts insurers send Form MA 1099-HC instead. These forms go to both you and the state, so a mismatch between what you report and what your insurer reports gets flagged. Track exact months if you changed plans mid-year or had a gap.
Third, file the right schedule. Schedule HC in Massachusetts, Form 540 in California, Schedule NJ-HCC in New Jersey, Form RI-1040 in Rhode Island, and Schedule HSR in D.C. If you were covered all year, the paperwork is short. If you had a gap, the form walks you through the penalty calculation or an exemption claim. Ignoring a state correction notice can result in the penalty being added to your tax bill automatically based on insurer-reported data.
If you qualify for an exemption, claim it when you file. Most run through the tax return, but a few (religious conscience in California, for one) require a separate application through the state marketplace. Handling it at filing time is faster than waiting for the state to flag you.