The 4980H(a) penalty: $3,340 per full-time employee after the first 30.
If an employer does not offer coverage to at least 95% of its full-time employees and at least one of them receives a premium tax credit, the 2026 payment is $3,340 for each full-time employee after the first 30.
When the payment applies.
The 95% Test
The employer fails to offer minimum essential coverage to at least 95% of its full-time employees and their dependents.
One Credit Triggers It
At least one full-time employee receives a premium tax credit through the Marketplace.
The 2026 Amount
$3,340 per full-time employee after the first 30, per Rev. Proc. 2025-26.
How the payment is computed.
Subtract 30
The payment applies to all full-time employees minus the first 30, whether or not they received a credit.
A Worked Example
An employer with 80 full-time employees owes $3,340 times 50, or $167,000, for 2026.
Indexed Yearly
The $2,000 statutory amount is indexed. The 2026 figure of $3,340 comes from the premium adjustment percentage.
Late Reporting Is Separate
This payment is in addition to any Section 6721 and 6722 reporting penalties.
Quick answers.
Short answers. This is general information, not legal or tax advice.
How Does the IRS Find Out?
It compares what employers report on Forms 1094-C and 1095-C with which employees received premium tax credits.
Do We Pay Right Away?
No. The IRS says employers should not make a payment without first being contacted by the IRS.
Does Late Reporting Cause It?
Not by itself, but missing or wrong forms leave you without the record that proves what you offered.
Where the rules and figures come from.
Each figure on this page comes from the source below. Amounts are indexed or updated over time, so confirm current figures before relying on them.
IRS Employer Shared Responsibility
Letter 226-J, Letter 227 and the employer mandate overview.
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