When I was preparing taxes returns as an IRS certified volunteer with Pasco County United Way earlier this year I had a number of families with large tax bills due to Obamacare.
If you or any member of your family does not have an Affordable Care Act (ACA or Obamacare) compliant healthcare plan you could be looking at a large penalty in 2015 and an even bigger one in 2016. In short, you owe the penalty for any month you, your spouse, or your tax dependents don’t have insurance that qualifies as minimum essential coverage. You can find coverage that counts here.
Let’s look at the history of this penalty:
- In 2014 the penalty was the higher of:
- 1% of household income, maximum of average Bronze plan, or
- $95/adult, $47.50 per child under 18, maximum $285
- In 2015 the penalty is the higher of:
- 2% of household income, maximum of average Bronze plan, or
- $325/adult, $162.50 per child under 18, maximum $975
- In 2016 the penalty will be the higher of:
- 2.5% of household income, maximum of average Bronze plan, or
- $695/adult, $347.50 per child under 18, maximum $2085
Based on these 2016 calculations a married couple, with 2 children and $70,000 in income would pay a $2,085 penalty when they file their 2016 taxes.
I just dread informing families that are struggling to make ends meet that not only won’t get that refund they were anticipating, but they will owe money for Obamacare.