GetInsured and TaxACT Unveil 11 Reasons You May Not Have to Pay a Health Insurance Tax Penalty
One of the many new developments under the Affordable Care Act (ACA) is the inextricable linking of your health insurance -- or lack of it -- and your tax return. "According to a Kaiser Family Foundation poll, 77 percent of Americans are aware that there is a tax penalty for not buying health insurance," said Ivan Williams, senior policy analyst at GetInsured. "We think people will be surprised to learn that many taxpayers won't have to pay a penalty."
Those who are subject to the penalty will have to pay $95 per uninsured adult and $47.50 per child under the age of 18, or 1 percent of household income above the income tax filing threshold ($10,150 for an individual, $20,300 for a married couple filing jointly) -- whichever is greater.
The penalty for 2015 will be much higher, however, doubling to 2 percent of household income. To avoid the penalty for being uninsured in 2015, you'll want to enroll in health insurance before this Sunday, February 15.
In an effort to help you understand how the law affects you and your wallet, GetInsured and TaxACT have published the following 11 reasons you may not have to pay the piper.
- You're adequately insured. If you had "minimum essential coverage" throughout 2014 -- either through your own, your spouse's employer, or through a marketplace plan -- you're all set. You'll see the appropriate box to check on your tax return. This is also true if you're enrolled in Medicaid, Medicare or TriCare.
You were uninsured for less than three months in 2014. The penalty only kicks in if your uninsured period lasted longer than three months. For example, if you lost employer coverage and then got a new job in which coverage didn't start right away.
You had coverage in place by May 1, 2014. Were you late to the game but managed to get coverage that started on or before May 1, 2014? If so, you can claim an exemption for the months you were uninsured before May. But don't count on this exemption again next year.
You didn't qualify for Medicaid solely because your state didn't expand eligibility for Medicaid under the Affordable Care Act.
- You're exempt from filing taxes. If your income is low enough that you don't have to file a federal tax return , the penalty doesn't apply to you.
You couldn't afford insurance. If the lowest-priced insurance coverage available in your area would cost more than 8 percent of your income, you won't pay a penalty if you don't buy it.
You had a hardship. If you experienced a significant disruptive life issue -- such as domestic violence, being evicted from your residence, a fire or flood, or a death in your family -- you may be exempt from the penalty .
- You were out of the country for most the year. If you weren't physically present in the United States for at least 330 days in a 12-month period, you're not subject to the penalty Here's more info from the IRS.
- You are a member of a federally recognized tribe, are eligible for services through an Indian Health Services provider, or you're part of recognized religious sect a that has a faith-based objection to insurance, social security and Medicare.
You were in prison. If you were incarcerated in 2014, you're free from paying a penalty.
You're a resident of the United States Territories. The law considers you as already having minimal essential coverage.
Finally, keep in mind that the taxes you're filing are for 2014 so if you purchase a health plan between now and the last day of open enrollment (February 15), it won't save you from the penalty for not having had coverage last year, unless you qualify for any of the 11 exemptions listed above.
About GetInsured
About TaxACT
Contact
Jessi Dolmage
TaxACT Public Relations
(319) 373-3600
