For the Health Insurance penalty waiver, is the percentage of not affordable based on before a premium tax credit or after?

[recacortez]

I didn't have any insurance but if I had take the premium tax credit my out of pocket would have been less than 8.05% if I didn't use the tax credit it would exceed 8.05%

[ChristinaS · Accepted solution]

After. The 8.05% calculation is not the simplest for many taxpayers without insurance. Although individuals who did not have health insurance would not actually have a Premium Tax Credit, they must account for this hypothetical in the 8.05% calculation. If a Marketplace insurance option was $600 per month before credits, and your income would have allowed you a $200 subsidy per month as a credit (either as Advanced subsidy or on tax return), its not wholly accurate to refer to the cost as $600 when doing the 8.05% calculation. You would need to ascertain the exact Premium Tax Credit (PTC) that you would have been eligible for per the exact income on your 2016 return.

SuperUser TaxGuyBill laid it out in the post below, and so I direct you there for the nitty gritty:

https://ttlc.intuit.com/questions/2943315

If you check that plans were unaffordable, have the supporting math saved with your tax records.