SPECIAL UPDATE: Understanding the connection between health insurance and taxes
Each year, along with the wonder of spring, comes our annual obligation to file our taxes. So it’s a good time to be up to date on the connections between health insurance coverage and taxes and it may be an even better time for your community to partner with a voluntary tax assistance program to help educate consumers and help them address this important new requirement.
When you file your taxes, you’ll need to include information about your health coverage. Whether you enrolled in coverage, received financial help, or chose to go without coverage there may be tax implications-- including the possibility of a penalty payment. Below are resources that will help you understand your 2015 health coverage status and what you need to do next!
Free Tax Return Preparation for Qualifying Taxpayers
The Volunteer Income Tax Assistance (VITA) program offers free tax help to people who generally make $54,000 or less, persons with disabilities and limited English speaking taxpayers who need assistance in preparing their own tax returns. IRS-certified volunteers provide free basic income tax return preparation with electronic filing to qualified individuals. You might also consider training to become a VITA volunteer.
In addition to VITA, the Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers, particularly those who are 60 years of age and older, specializing in questions about pensions and retirement-related issues unique to seniors.
Before going to a VITA or TCE site, check out the Services Provided and check out the What to Bring page to ensure you have all the required documents and information our volunteers will need to help you.
The fee for not having health insurance
If you can afford health insurance and have chosen not to buy it, you will pay a fee when you file your federal tax return for the year you chose not to have coverage. Called an individual shared responsibility payment, the fee is sometimes called the "penalty," "fine," or "individual mandate."
You will owe the fee for any month you, your spouse, or your tax dependents don’t have health insurance that qualifies as minimum essential coverage-- unless you qualify for an exemption
The fee for not having coverage in 2015: The fee is calculated 2 different ways – as a percentage of your household income, and per person. You’ll pay whichever is higher.
2% of household income/ Maximum: Total yearly premium for the national average price of a Bronze plan sold through the Marketplace
$325 per adult, $162.50 per child under 18/Maximum: $975
The fee for not having coverage in 2016 is the higher of these:
2.5% of household income/Maximum: Total yearly premium for the national average price of a Bronze plan sold through the Marketplace
$695 per adult, $347.50 per child under 18/Maximum: $2,085
Learn more about estimating and paying the fee