“I’m gonna have to pay what?”
As many people found out when filing their 2014 taxes this year, Obamacare is in full affect. If you were uninsured for part or all of 2014, you were accessed a 1% or $95 per adult/$47.50 per child (whichever was higher) tax penalty. For those who are uninsured through 2015, there will be a 2% or $325 per adult/$162.50 per child (again, whichever was higher) tax penalty. If you didn’t think the government was serious about this Obamacare thing and STILL remained uninsured throughout 2016 you’ll have to pay 2.5% or $695 per adult/$347.50 per child (still whichever is higher) tax penalty.
“But I was covered for PART of the year. What do I have to fork out?”
If you were covered for part of the year but lost coverage and were unable or just didn’t re-enroll, you will be assed a tax penalty based on 1/12 of the yearly penalty for however many months you went without coverage.
“Fine, I knew there would be a penalty and I went without coverage anyway…how do I pay?”
When you file your taxes for 2015 your tax penalty will be handled at that time and your tax advisor can assist you with any payments that need to be made.
“What if I don’t pay the penalty, what will happen?”
If you don’t pay the penalty at the time of filing your taxes for some reason, it will be witheld from future tax refunds you may receive. On a good note, there won’t be any liens, levies or criminal penalties for failing to pay.
“Forget it, I’m getting away from California and this Covered Ca thing! I’m moving to Mississippi, they won’t make me pay a penalty there.”
Well, this is a nationwide tax law. So it doesn’t matter which side of the Mississippi you reside on, this applies to you.