IRS Penalties Part 2: The Healthcare Penalty

Yesterday’s post discussed some of the IRS penalties attached to non-payment, missing information, or late payment of taxes.

While the passage of the Affordable Care Act allowed millions of uninsured people to access health care coverage and laid the groundwork for more extensive employer-based coverage, it also came with a penalty attached for non-compliance. If you’re now among the millions of Americans with new health care coverage, you may not know about this penalty.

Generally if the IRS determines you earn enough to purchase a policy on the insurance marketplace you are required to do so unless you have employer-sponsored coverage. If the policies you purchase aren’t sufficient for you and your qualifying dependents per IRS standards, you could still incur a penalty. Here is the breakdown for the 2015 and 2016 tax years:

2015: Fines will be $325.00 per adult and $147.00 per child to a maximum of the higher of either $975.00 or 2 percent of your income.

2016: Fines will increase to $695 per adult, $347 per child to a maximum of the higher of either $2085 or 2.5 percent of your income.

If you are a low-income person, you can obtain a waiver that will exempt you from both the penalty and the purchase requirement. While this may leave you uninsured if you live in a non-Medicaid expansion state, you won’t have to worry about being hit with a hefty fine if you can’t afford coverage for yourself and your family.

Love it or hate it, the ACA will be a part of our healthcare landscape for the foreseeable future. By understanding the IRS penalties attached to the ACA, you can exercise the option of either obtaining a low-income waiver, purchasing coverage, or paying the penalty at tax time.

As with any complex tax matter, it’s best to check in with a qualified tax advisor who can guide you in making the best decision based on your unique circumstances and tax scenario. You’ll learn whether or not you qualify for a waiver, and you’ll better understand all the options available to you.

 

 

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

More to explorer

IRS Problems?

Get peace of mind with the top-rated tax relief team fighting on your side.
we can help
        I signed my contract with Ideal about a month ago and couldn't be more pleased with my experiences with this company so far. They were able to get me into a safe status with the IRS and they are working on an offer to settle as well. I have been very impressed, I thought everything would take much longer! Thank you, thank you, thank you for all your help.
Linda L.
        IRS grabbed my check. They got it released and got the IRS to drop it. Say waht? Awesome. Thought I was dead in the water.
Tom M.
        I filed Chapter 7 over 10 years ago. So I got no choice. David helped me right away, I think I owed like $49 grand to the feds and $7 grand to the great state of North Carolina. You want your engine fixed, mechanic, you need surgery-Surgeon, Tax issues---these guys. Yes very happy and thank you Ideal Tax Solution, BIG RELIEF sleeping better now.
Charles C.

Leave a Comment

Your email address will not be published. Required fields are marked *