Concerned over having to pay penalties for not having health insurance? Read on to learn more about whether you’ll owe money when filing your taxes without insurance.
The Affordable Care Act (ACA) requires all Americans to have health insurance or pay a fine, but this no longer is applied at the federal level, so that answer on whether you will have to pay a fine depends on what state you live in. There are five states and the District of Columbia that have an individual mandates at the state level. The states are as follows, Massachusetts. New Jersey, Vermont, California, and Rhode Island.
There was a penalty if you went more than two months without Affordable Care Act (ACA) compliant health insurance, prior to 2020. The “Obamacare individual mandate” was the name given to this requirement. The penalty was designed to encourage everyone who wasn’t insured by their employer or a government-sponsored program to acquire health insurance. The federal ACA penalty for going without health insurance in 2018 was $695 per uninsured adult or 2.5% of your income, whichever amount was higher, according to Kaiser Health News.
Congress passed the Tax Cuts and Jobs Act (TCJA) at the end of 2017 in response to concerns about the affordability of marketplace ACA coverage. Starting in 2019, the law cut the individual penalty under Obamacare’s individual requirement to zero dollars. There is no tax penalty at the federal level now that the individual mandate tax penalty has been eliminated.
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