Will You Pay an Extra Tax This Year for Not Having Health Insurance?
New for Tax Year 2014 is “The Individual Mandate” (aka Individual Shared Responsibility), which is part of the Affordable Care Act (aka Obamacare or Health Care Law). If you don’t have Health Insurance Coverage for everyone in your family, you could pay an Extra Tax.
The Individual Mandate provision of the Affordable Care Act requires you and each member of your family to:
• have qualified health insurance, also called minimum essential coverage,
• have an exemption, or
• make a shared responsibility payment when filing your federal income tax return.
If you don’t have health insurance, you may qualify for an Exemption. Some exemptions must come from the Marketplace, some from the IRS, and some can come from either organization. A summary of exemptions is available at irs.gov/uac/ACA-Individual-Shared-Responsibility-Provision-Exemptions.
Some exemptions require an Application to be filed before your tax return is filed. For additional information about how to apply for exemptions that may be granted by the Marketplace, visit HealthCare.gov/exemptions.
Open Enrollment ends February 15th
We are making you aware of this provision because Open Enrollment at HealthCare.gov for 2015 begins November 15th and ends February 15th.
We won’t meet with most of our tax clients to prepare their 2014 taxes until after Open Enrollment ends. If you don’t have Health Insurance when we prepare your 2014 taxes, you are looking at paying the Extra Tax for another year, and it will be higher in 2015.
You will need to acquire Health Insurance during Open Enrollment or qualify for an Exemption to avoid the Increased Extra Tax for 2015.
New Tax Forms
There are 3 new tax forms for 2014 that you might be receiving. Please put these with your other tax forms, if you receive them. We will need them when we prepare your tax returns.
1095-A – Issued by the Marketplace and required for 2014.
1095-B – Issued by Insurance Companies and optional for 2014.
1095-C – Issued by Employers (over 50 employees) and optional for 2014.
Extra Tax for 2014
For Tax Year 2014, the extra tax for not having health insurance is the greater of:
$95 per uninsured adult and $47.50 per qualifying child, up to $285, or
Up to 1% of Household Income. (For example: $200,000 x 1% = $2,000)
Increased Extra Tax for 2015
The Extra Tax increases for Tax Year 2015 to the greater of:
$325 per uninsured adult and $162.50 per qualifying child, up to $975, or
Up to 2% of Household Income. (For example: $200,000 x 2% = $4,000)