Will I get penalized on my 2014 Income Tax Return for not having insurance and if so, how is it calculated?
Yes, beginning in 2014, U.S. citizens and legal residents must carry health insurance or be subject to a penalty.
The penalty is phased in over time. For the 2014 tax year, the penalty will be $95 per person or 1 percent of a household’s taxable income, whichever is greater, with the amount decreased by one-half for dependents under the age of 18. In 2015, the penalty jumps up to $325 per person, or 2 percent of a household’s taxable income. In 2016 the penalty will be $695 per year ($2,085 maximum per family), or 2.5 percent of a household’s taxable income. See below chart:
The penalty is the greater of:
Yes, the following are exceptions to the rules:
What if I have coverage, will there be any credits when filing my 2014 Income Tax Return?
By having coverage you can receive a credit, known as the Premium Tax Credit:
Advance payments of the tax credit can be used right away to lower your monthly premium costs. If you qualify, you may choose how much advance credit payments to apply to your premiums each month, up to a maximum amount. If the amount of advance credit payments you get for the year is less than the tax credit you’re due, you’ll get the difference as a refundable credit when you file your federal income tax return. If your advance payments for the year are more than the amount of your credit, you must repay the excess advance payments with your tax return.
Yes, March 31st was the last day to enroll in a plan for 2014 coverage. However, after March 31, 2014, if you have a qualifying life event like a job loss, birth, marriage or divorce consumers can still purchase new 2014 health plans.
The next chance to sign up comes in November. Open enrollment for 2015 plans doesn’t begin until Nov. 15, 2014 and ends on Jan. 15, 2015
What are my options to obtaining health insurance?
You have several options to get health insurance: