Tax Penalty At-a-Glance: Who Will Pay & How Much
By law, you need to have health insurance by 2014. If you already get insurance through your employer or your partner's employer, you're all set. But what happens if you don't meet this requirement from the Affordable Care Act?
Who Has to Pay and How Much Is It?
If you don't buy health insurance, you may have to pay a fine when you file your annual income taxes.
For the first year of the new law, 2014, the fine for not having insurance is the lowest it will be. After that, it goes up steeply in 2015 and again in 2016.
There are two ways the government will calculate what you owe when you file your taxes. You have to pay whichever amount is higher.
The fees are as follow:
- $95 for each adult and $47.50 for each child, but not more than $285 total per family
- Or 1% of your family's yearly taxable income
- $325 for each adult and $162.50 for each child, but no more than $975 total per family.
- Or 2% of your family's yearly taxable income
2016 and beyond
- $695 for each adult and $347.50 for each child, but no more than $2,085 per family
- Or 2.5% of your family yearly taxable income
Don't Assume You Can't Afford Insurance
To get it, you must enroll in a plan through your state's Marketplace.
- The amount you make each year must meet certain rules. Some financial support may be available even if you are in a middle-income range.
- There are two types of subsidies available:
- Premium tax credit. This money can help pay for your monthly insurance payments, which is called a premium.
- Cost-sharing subsidy. If you qualify, you will pay less when you get health care or buy medicine because your deductibles, copays, and coinsurance will be lower.