Here Comes The Health Care Tax Penalty
The Patient Protection and Affordable Care Act, commonly called the “Affordable Care Act” or “ObamaCare” was enacted four years ago and requires all US Citizens to have health insurance or pay a penalty on their tax return. The IRS was tasked with enforcement of the law and the first important deadline is March 31, 2014.
If you’re currently insured, just continue your insurance and there’s nothing further required. However, if you don’t have insurance, there will be a penalty imposed in 2014 unless you either obtain insurance or enroll through the Health Insurance Marketplace. The enrollment period for 2014 runs through March 31, 2014.
The law also provides various incentives depending on the type of coverage you select. A Premium Tax Credit is available to lower insurance premiums if you select certain premium plans. There are also provisions to avoid the uninsured penalty if you experience a change in circumstances during the year (family size, marital status or income changes for example).
While there has been a great deal of controversy regarding the law and is implementation, the reality is that it is now in effect and missing the March 31, 2014 deadline will likely result in additional tax liability for 2014. If you haven’t already, it’s time to take a look at the law’s impact for you and make some important decisions by the end of March.