| Signed | March 23 and March 30, 2010, by President Barack Obama (two laws, read together) |
| Public laws | 111-148 and 111-152 |
| In one sentence | A health law that put a new credit, two new taxes and a new form on the individual return. |
| Still with us | The premium tax credit; the 3.8% and 0.9% taxes at thresholds never indexed; the employer mandate |
| Gone | The individual mandate penalty (zero since 2019); the 10% medical floor (back to 7.5%); the Cadillac tax and device tax (repealed before or soon after taking effect) |
Why it is on this timeline
The Affordable Care Act was a health insurance law, passed without votes from the minority party and argued over ever since. It belongs here because it changed the tax return for a great many people who never thought of it as a tax law — and because two of its taxes are quietly reaching more households every year.
What it did
- The premium tax credit, from 2014. Anyone buying insurance through the Marketplace with income between the poverty line and four times it gets a credit, usually paid in advance to the insurer. The catch is reconciliation: at tax time the advance is compared with the credit actually earned on Form 8962, and if income came in higher than estimated, part of it is paid back. The 2021 and 2022 laws removed the four-times-poverty cliff for 2021 through 2025; that enhancement expired at the end of 2025, and 2026 premiums rose for many enrollees. See Marketplace insurance.
- The 3.8% net investment income tax, from 2013, on interest, dividends, capital gains, rents and passive business income for taxpayers with income over $200,000 single or $250,000 joint. The thresholds are written in the statute and have never been indexed, so a level that was clearly “high income” in 2010 is reached today by two professionals with ordinary salaries selling a rental.
- The 0.9% additional Medicare tax on wages and self-employment income above the same thresholds, also unindexed. Employers withhold it once an individual’s wages pass $200,000 regardless of filing status, which is why two-earner couples often settle up on Form 8959.
- The individual mandate: a penalty for going without coverage, starting at $95 in 2014 and rising to $695 or 2.5% of income. The 2017 law set the penalty to zero from 2019; the requirement is technically still in the statute at $0.
- The medical expense floor raised from 7.5% to 10% of income. It drifted back to 7.5% through a series of extensions and was made permanent at 7.5% in 2020.
- The employer mandate for employers with 50 or more full-time-equivalent employees, and a small-business health care credit that few can use because it requires buying through the SHOP exchange.
- A $2,500 cap (indexed) on health flexible spending accounts, which had no statutory cap before; a 10% tanning tax.
What it meant
Anyone with Marketplace coverage gained an annual chore: Form 1095-A in the mail and a reconciliation on the return, with money owed back if income was underestimated. A couple with combined wages of $260,000 pays 0.9% on the last $10,000, and the same couple selling appreciated stock pays 3.8% on top of capital gains tax. Because the thresholds have been frozen since 2013, these two “high earner” taxes reach people who were nowhere near them when the law passed — which is why they appear on our page for high earners.