The 2015 and 2016 Penalty for Not Having Health Insurance
by Esmeralda Mercado
Did you know that if you were uninsured in 2015 but you buy insurance now, you could still owe a penalty when you file your income tax return this April? That is because income tax filings are based on the activity for the previous year. Although it may be too late to avoid the tax penalty for being uninsured in 2015, it’s not too late to avoid it for 2016. Getting insurance now will protect you from having to be penalized when you file your tax return in 2017. For free quotes or to enroll, go to www.healthforca.com.
I was uninsured in 2015. What is the penalty?
If you did not have health insurance for three months or more in 2015, and you did not qualify for an exemption, the penalty when you file taxes will be the greater of:
- $325 per adult plus $162.50 per child, OR
- 2% of your annual taxable income minus the Federal Poverty Line. (Click here and go to Table 1-1.)
- The penalty is subject to a maximum of $975 per family.
If I am uninsured in 2016, what is the penalty?
If you do not get insurance now, you will not have a valid exemption. The penalty when you file taxes for 2016 will be the greater of:
- $695 per adult plus $347.50 per child, OR
- 2.5% of your annual taxable income minus the Federal Poverty Line
- The penalty is subject to a maximum of $2,085 per family.
Note that if you had coverage for part of the year, the penalty will be pro-rated. Also, if you were without health insurance for two months or less, then more than likely you will not owe a tax penalty for being uninsured. Click on the following link and search for Types of Coverage Exemptions to see a list of exemptions that could protect you from having to pay a penalty. For more information and how this applies to your specific situation, we advise that you consult with your tax advisor or CPA.
Posted: February 10th, 2016 under California Marketplace