Penalty

Penalty

Tue, 12/08/2020 - 15:03
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The penalty at the federal level is gone, starting January 1, 2019.

♦ Several states have their own mandate and some assess a penalty for not having health coverage.

If you don’t have a health plan that qualifies as minimum essential coverage, you may have to pay a fee for the months you’re uncovered.

♦ This fee is often referred to as a "penalty." The IRS calls the penalty a Shared Responsibility Payment.

The fee is calculated two ways. You are responsible for paying the higher amount.

For 2018, the fee is 2.5% of your household income, up to a maximum of $3,396.; or a dollar amount of $695 per adult ($347.50 per child), up to a maximum of $2,085 (3 x $695).

• The $3,396 figure is the average price of a Bronze plan sold thought the Marketplace.

You’ll pay the penalty on your federal income tax return. People with very low incomes and others may be eligible for exemptions.

If you’re uncovered just some months of the year, you pay 1/12 of the penalty for each month you’re uninsured. If you’re uncovered for only 1 or 2 consecutive months, you don’t have to pay the fee at all.

You’ll pay the penalty on your federal income tax return. The IRS calls the fee the Shared Responsibility Payment.

People with very low incomes and some others may be eligible for health care exemptions.

Update: December 22, 2017

President Trump signed into law a tax bill which includes a provision eliminating the penalty for not buying health insurance.

It takes effect starting in 2019.

Related content

Individual Mandate

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• Exemptions from penalty?

Penalty

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• How much is the penalty?