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Tax Penalties

The Affordable Care Act (ACA) includes a requirement, referred to as the “individual mandate,”  that all US citizens attain health care coverage (insurance), or pay a tax penalty. This includes both adults and children who are legal US citizens.

 

 

Fulfilling the Mandate

The individual mandate is fulfilled by obtaining a form of health coverage. Certain groups are exempt from the requirement, including those whose income level is below the threshold for filing a tax return.

 

Learn More: individual mandate

 

 

 

Tax Penalties

 

Those who do not obtain and maintain health insurance coverage will be subject to tax penalties, starting in 2014. The amount of the penalties increases each year.

 

·         For 2014, the penalty is $95 per adult and $47.50 per child, up to $285 per family or 1% of family income, whichever is greater.

 

·         For 2015, the penalty is $325 per adult and $162.50 per child, up to $975 per family or 2% of family income, whichever is greater.

 

·         For 2016 and beyond, the penalty is $695 per adult and $347.50 per child, up to $2,085 per family or 2.5% of family income, whichever is greater.

 

 

Current Status

 

 

The individual mandate took effect on May 1st, of 2014. Individuals who did not have the minimum essential coverage requirement met by that date can expect to have a tax penalty assessed against them when they file 2014 taxes.

 

 

 

Additional Information:

 

 

Individual Mandate – Obamacare Facts.com

The fee you pay if you don't have health coverage – Healthcare.gov

Fees & Exemptions – Healthcare.gov

 

 

 

 

 

 


 

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