The Affordable Health Care Act has helped people all over the country finally get the health insurance that they couldn't previously afford. However, this has also caused a headache and tax hit for those who refused to accept coverage, or who couldn't afford health coverage even at the lower costs. Here is a look at what people need to know about the tax penalties for not carrying health insurance, and how some people might get a break anyway.
How Much Is The Penalty For Not Having Insurance In 2015?
If a person did not have health coverage in 2015, they may be forced to pay a penalty. This penalty comes down to one of two different calculations. If a person does not have insurance, the first way to figure out the penalty is to look at the percentage of the household income and take 2.5 percent of that total as the yearly penalty. The second way is to attribute $695 per adult and $347.50 per child. After this, figure out how many months that the person did not have insurance and divide the amount by those months.
So, if a family of two did not have insurance for the entire year and made $50,000, they will pay $1,390, which is the higher of the two forms of penalty. If the couple had insurance for nine months, they will pay $347, which is that penalty spread out over only three months. There is also a number of confusing aspects if only one person does not have insurance while the other does. Then it needs to be split up to just what the one person owes.
How To Deal With Not Having Health Insurance In 2015
Last year, there was a break for people who were late on getting coverage, so not everyone who went uncovered throughout the year had to pay. This year, it is tougher. There is only a chance for a break in what is called "Stop Gap" coverage. This simply means that a person needs to have coverage for 10 full months in the year. This means that if a person had insurance for even one day in a month, that month counts for the year. An example is if a person lost their coverage on March 3 and got coverage back on June 16, that counts as only two months and the person is eligible for stop gap coverage.
Exemptions To Not Having Health Insurance In 2015
The good news is that the IRS understands that not everyone can afford to have insurance. On HealthCare.gov, there is a questionnaire that they present that allows a person to learn if they can file for exemptions to the health tax payments. These exemptions include hardships, life event changes, health coverage compared to financial status, membership in some groups, and more. When one finishes answering these questions, the IRS will offer the exemption possibilities and a person can learn how to apply for them and not have to pay the possibly large health care tax penalty.
For more Tax Day tips, click here.
Shawn S. Lealos is a freelance writer who graduated from the University of Oklahoma in 2000 with a Bachelor's Degree in Journalism. He writes for a variety of national publications and has over 15 years of sports journalism experience. Follow Shawn on Twitter @sslealos. aExaminer.com.
for more features.