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Affordable Care Act 2014 Premium Tax Credit and Penalties

Affordable Care Act 2014 Premium Tax Credit and Penalties - TaxACT

Can provisions of the Affordable Care Act help you pay for health insurance coverage?

Yes! Starting January 1, 2014, you are generally required to have adequate health insurance or pay a penalty.

The good news is that if your income is within certain limits, you may qualify for an advanced premium tax credit to help pay for that coverage. This credit is paid directly to your insurance company as a subsidy.

How do I know if I qualify for a premium tax credit (subsidy)?

You may be able to get this tax credit if your employer doesn’t offer health insurance, or if they do, it covers less than 60% of covered benefits, or the premiums would cost you more than 9.5% of your annual household income.

To qualify, you must purchase insurance coverage through your state’s “marketplace” – the website for insurance.

Your income must not be too low or too high. You cannot get the credit if you qualify for government programs like Medicare and Medicaid. You are only eligible for the credit if your household income is above between 100% and 400% of the federal poverty level.

To see if you may qualify for the credit, use TaxACT’s Health Care Tax Credit Calculator.

How do I claim the credit?

You start by applying for insurance through your state’s health insurance marketplaces, also known as an exchange.

You must enroll before March 31, 2014, to receive health insurance through the exchange.

When you apply through an exchange, you’ll answer questions to determine whether you qualify for the credit.

What happens if my income is higher or lower than I expected?

Most of us can’t predict exactly how much we’ll make in a year. Make the best estimate you can, and when you file your 2014 income tax return, the amount is reconciled with the tax credit you should receive based on your actual income for the year.

If you incorrectly estimate your income, you may receive a bigger or smaller tax credit than you were entitled to. If you were entitled to a larger credit, you will get that money back. If you qualified for a smaller or no credit, you may have to pay back some or all of the credit.

If you don’t like the possibility of having to pay back money at the end of the year, you can pay your entire premium yourself during the year.

That way, you would receive your entire credit as a refund when you file your income tax return, provided you were entitled to one.

Who doesn’t have to get health insurance or pay a penalty?

Not everyone has to buy insurance or pay a penalty. You won’t be penalized for not having insurance if your income is low enough that the lowest cost plan would cost more than 8% of your 2014 income, or if you are not required to file a tax return based on your income level.

There are also exceptions for people whose religious beliefs prohibit medical treatment, members of a recognized health care sharing ministry, members of a federally recognized tribe, and people in other special situations.

How much penalty do I pay if I don’t get insurance?

The penalty for 2014, which will be paid on your tax return due April 2015, is 1% of your annual 2014 income or $95 per person, whichever is higher.

If you have children under age 18, the penalty is $47.50 per child – up to $285 total per family.

The penalty rises for 2015, and again for 2016. The maximum penalty per family in 2016 is $2,085.

Paying a penalty does not mean you are covered or entitled to any medical services.

 

Have you compared the insurance plans on the marketplace?

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About Sally Herigstad

Sally Herigstad is a certified public accountant and personal finance columnist and author of Help! I Can't Pay My Bills, Surviving a Financial Crisis (St. Martin's Griffin). She writes regularly at CreditCards.com, Bankrate.com, Interest.com, RedPlum, and MSN Money. She is an experienced speaker and a member of Toastmasters International. Follow Sally on Twitter.

32 comments
mariahasbarger
mariahasbarger

Hello  want to say thanks to this Dr Idibia about the good things he have done for me and my family i was married to Jude  and my name is Sandra will both leaves in England and will have 3 kids after a year old of my last born, he start behaving so strange to me which i cannot tell anyone one night, I was cooking not knowing my husband is about living the house i was just so busy cooking then after i finish cooking, I called him and he answered me by saying what is going on? and why are you calling me? I told him honey the food is ready lets eat he said no and i don't no what to do next i pleaded to him still no way then i plead him to forgive me what ever thing i have done if i have wrong him he say nothing will talk tomorrow i said okay then i couldn't eat the next day, i called him please can will take our breakfast now? he said no he will eat when he get to working place i was so depressed about what he is doing to me i look and said God help me i don't no what to do anymore after he have left, i called my friend and she run down to my house then i express my pain to her she said let's wait till he come's back from work then i said okay till the next day i did not see him i called his cell phone number no answer then i can my friend again she came and tell me that he have heard about one man called Dr Idibia who help in a relationship issues then i said how am i sure is going to work out? she said it's going to work that she have seen so many people Dr Idibia have helped then i said on how can i get in contact with the Dr Idibia? she said no problems she will give it to me then she gave me his email and his cell phone number then i called him first and he answer me very well and i was so happy for the hope he have given to me after casting the spell, in 3 days, In the evening, i saw my phone ringing as the Dr said to me it was my husband tell me his is very sorry about what he did to me i was so shock i end the call and called the Dr Idibia and tell him what my husband just told me he said it is done so what was how i was helped id you are in such relationship problems kindly via Email {greatidibiaspelltemple30@gmail.com or call him +2348103508204 he will help you found your way out of your  relationship life now am happy with my husband again

mariahasbarger
mariahasbarger

Hello  want to say thanks to this dr samura about the good things he have done for me and my family i was married to Jude  and my name is Sandra will both leaves in England and will have 3 kids after a year old of my last born, he start behaving so strange to me which i cannot tell anyone one night, I was cooking not knowing my husband is about living the house i was just so busy cooking then after i finish cooking, I called him and he answered me by saying what is going on? and why are you calling me? I told him honey the food is ready lets eat he said no and i don't no what to do next i pleaded to him still no way then i plead him to forgive me what ever thing i have done if i have wrong him he say nothing will talk tomorrow i said okay then i couldn't eat the next day, i called him please can will take our breakfast now? he said no he will eat when he get to working place i was so depressed about what he is doing to me i look and said God help me i don't no what to do anymore after

pamela33
pamela33


Am now happy happy and happy, my name is Pamela from UK I believe AMINE now, After so many comments on how AMINE helped alot of people got back their Ex, Jobs and properties, i contacted him and tell my story of how a lady broke my relationship, Been married for 8yrs and with 3kids, suddenly my Husband moved out and told me never to contact him again, i was so heart broken, depressed and sad, after all the story,Amine spell temple told me to put my mind at rest and told me that all my problems will be solved within 2days , i was still hoping until Amine called me again for my husbands picture and told me, i will have to get some items and i did all he asked me, on Sunday morning David came home by himself and knelt down to beg me, weeping bitterly and asked for forgiveness, i did forgive him and i told Amine spell temple about everything and he said all he wants from me is to share the good news with the world so people out there , here is a prove that real casters are still online, for any kind of problems that need solutions, contact him:aminespelltemple@yahoo.com

matildamor97
matildamor97

Hello,
Am Annale, from UK,let me give this testimony to the public about a great man who help me out in serious illness I have HIV AID for good 5year and I was almost going to the end of my life due to the way my skin look like all I have in my mind is let me just give up because life is not interesting to me any longer but I just pray for god every day to accept my soul when ever I’m gone lucky to me my kids sister run to me that she found a doctor in the internet who can cure HIV AID she help me out on everything the man ask for my picture, so he can cast a spell on me from his temple after all he ask is done 45mins later I started getting more stronger my blood start flow normally for 4 to 5 days I start getting Wight before a month my body start developing my skin start coming up after 2month I went for HIV test and I was tested negative I’m so happy that I can say I’m not a HIV patient if you have HIV AID or any sickness please for your save contact him for cure now driayaryi2012@hotmail.com

matildamor97
matildamor97

Hello Everyone, who still care about his/her ex-lover/husband or wife. I am from London I never though my husband will come back to me again, I am very happy at last that my husband came back to me after i was acquiesce of been barren of not been able to bring front children,Then i came across DR.OMON who help me in bring back my husband to his sense with a spell and now i have a baby girl to show to the world that i am fruitful. i am grateful and happier than never before, Thank You Doctor for helping me, email omonualovespelltemple@hotmail.com, if you still love or want your ex-lover and happy marriage with children.. omonualovespelltemple@hotmail.com

NannyK
NannyK

Hi Sally!

I'm a 24 yr old, healthy female. I've never had health insurance before so forgive me for my lack of knowledge in the matter. Correct me if I'm wrong, but here's what I understand so far about my situation:


I am just above the FPL with an income of $12,240 a year.


With that income, I am expected to contribute 2% of my income to my health care.


I am eligible for a Premium Tax Credit. 


I have not yet purchased insurance through the marketplace, but I am looking at a Silver plan where my monthly premium would (allegedly) be $15 if I opted to have my PTC credited directly to my insurer now.


Here are my questions (forgive me if I seem appallingly naive but like I said, no experience with health insurance whatsoever):


If I opt to have my PTC ($192/month) advanced directly to my insurer, will I have to pay back a year's worth (approx. $2,304) of the credit when I file next year?


If not the full amount, (as someone who never owes or comes out even on taxes) will I end up having to pay anything come tax season next year?


Will the full amount of my PTC be paid to my insurer?


I have spoken with several Navigators and they are thoroughly clueless. I've spoken with insurance companies and none of them can answer my questions either. Do you have any insight?

JohnAd
JohnAd

I am a retired State employee, and I have to purchase health insurance (100%) for my wife through the State group plan, which is 25% of our income.  Will I still get a tax credit at the end of the year (we are well within the 400% guideline)?
Its really confusing.

GenlisaJessca
GenlisaJessca

My name is JOY. i want to use this opportunity to thank my great doctor who really made my life a pleasurable one today. This great Doctor brought my husband back to me, i had 3 lovely kids for my husband, about 3 years ago i and my husband has been into one quarrel or the other until he finally left me for one lady. i felt my life was over and my kids thought they would never see their father again. i tried to be strong just for the kids but i could not control the pains that torments my heart, my heart was filled with sorrows and pains because i was really in love with my husband. Every day and night i think of him and always wish he would come back to me, until one day i met a good friend of mine that was also in a situation like me but her problem was her ex-boyfriend who she had an unwanted pregnancy for and he refused to take responsibility and dumped her. she told me that mine was a small case and that i shouldn't worry about it at all so i asked her what was the solution to my problems and she gave me this great man phone number and his email address. i was doubting if this man was the solution, so contacted this great man and he told me what to do and i deed them all, he told me to wait for just two day and that my husband will come crawling on his kneels just for forgiveness so i faithfully deed what this great man asked me to do and for sure after two days i heard a knock on the door, in a great surprise i saw him on his kneels and i was speechless, when he saw me, all he did was crying and asking me for forgiveness, from that day, all the pains and sorrows in my heart flew away,since then i and my husband and our lovely kids are happy. that why i want to say a big thank you to Dr.LULU ZAZA. This great man made me to understand that there is no problem on earth that has no solution so please if you know that you have this same problem or any problem that is similar, i will advise you to come straight to this great man. you can email him On; lowcobaspelltemple@gmail.com

Jerry
Jerry

68 yrs old, single, live on social security income. I opted out of medicare when I retired. What are my options?


ElayeAmbili
ElayeAmbili

I want to say thanks to this great man called Dr Samura who helped me in my marriage life. my name is Sarah Hasbarger lives in USA memphise so i was married to Albert we both love and like each other before our marriage, he care about my well being so i was so happy that i have  found a man like this in my life my parents love him so much because of his kindness towards me and the way he care about me after four years in my marriage, no child he was not showing me much care anymore but i notice something is going on which i no. then i keep on with the relationship and i was hoping one day God will open my way to have a child in my home then i keep on going to church from one play to another by telling all the pastors about my problems that i don't have a child so many of them promise me that soon i we have a child in my home i keep on hoping in God's miracle on till one day when i went for a visit in my friend office then i was welcome by my friend we started dis causing about so many things on marriage life i was so shock she ask me about my wedding and what is going on till now i still don't have a child then i told her my dear sister i don't no what to do anymore and am scared of loosing my husband who have be caring for me for a long time now then she said i we not loosing him i ask how? then she said there is one man called Dr Samura who help in a relationship then i keep on asking how about him she told me this man can do all thing and make things possible i never believe her for once that this man she is talking about can do it so fast. also i ask her how do i get his contact she said i should not worry my self then she gave me his contact email ID and his number to contact him i said ok i will try my best to do so she wish me the best of luck in life then i went home gotten home, found that my door is open i was scared  thinking so many things i don't no who is in my house now i look at the key in my hand i was thinking i did not lock my door shortly a word came into my mind that i should go inside and check if there is any body at home or my husband getting inside, i found that my husband move away his things in the house then i started calling his number refuses to pick i was like a mad Dog i cried and cried don't no what to do then i remember to that a friend of mine gave me a contact today i take my computer i emailed this man called Dr Samura also i called him on his cell phone which i received from my friend he spoke to me very well and i was happy my husband we come back to me so after the work was well done by Dr Samura, just in three days i heard my phone ringing not knowing it was my husband telling me his sorry about what he did to me then i accepted him again a month later, i was pregnant for him so i rest my testimony till i deliver safely i we give the best testimony again so my sisters and brothers if you are in such pain kindly contact this great man with this email SAMURATELLERSPELL100@LIVE.COM OR CALL +234810358204

njmm
njmm

Is the subsidy available to me if I KEEP my employers insurance if I am paying above  9.5% of my income for myself and my family. My wife does not work so there is no extra income to count.  

Everything I've read says it is available only if you go through the exchanges.

mom
mom

My husband, four children, and I do not have health insurance, do not qualify for low income subsidies, and are planning on filing our taxes in January.  How can we be penalized for not purchasing health insurance if the deadline of March hasn't been met.  Also, is the "fee" 1% of income period or is it 1% of income plus an additional 47.50 per child?

Gillygaloo
Gillygaloo

My husband and I appear to be at 409% of the poverty level.  So the subsidy is not going to happen for us.  Last year we paid enough in medical expenses and health insurance premiums out of pocket to be able to file long form.  Will this still be a possibility to do for 2014 (even if we don't buy coverage through the market place?  I realize the medical has to be over 10% of our income to be able to do that for 2013 and beyond.  But I think, due to the high deductible health plan we've had and will continue to have, we probably will meet that limit.

divorced dad
divorced dad

I am divorced.  My employer does not provide family coverage.  My ex-wife has a medical card for the children.  Will I be penalized for not having insurance on the kids?

Hal M
Hal M

In order for the IRS to collect the uninsured penalty there must be a tax refund due the uninsured individual.  Some are planning to adjust the number of deductions claimed or adjust their quarterly estimated payments to ensure they do not have a tax refund.  No tax refund, no penalty paid.

The trick is making sure you've paid enough taxes to avoid an estimated tax penalty, but not so much that you would get a refund.  The unpaid penalty will be carried over from year to year, kept on account, and there is discussion that interest will accrue at 3%. 

Ter
Ter

When referring to penalty how it going to be calculated in this scenario: married couple and 2 kids under 18 with MAGI 47k, husband and kids have health insurance thru husband work, wife no insurance. Will be penalty 1% of 47k or $285 family maximum?

Natallia Parsons
Natallia Parsons

When referring to 2014 household income, it would be helpful if you specified whether it is gross or AGI or MAGI. Without knowing exactly what figure it is, you are not really able to determine the impact or control the effect, like increasing your deductions to meet the target household income limits for subsidies.

NannyK
NannyK

@JohnAd  


Go to the Healthcare.GOV website. 


Click on "See Plans Before I Apply" It is to the left of the APPLY 

NOW button in the center of the page.


Fill out a about 6 basic questions and it will tell you if you qualify for a tax credit, how much that credit will be, and it will show you plans you could qualify for without having to sign up for anything. 


Hope that helps!


ChiTownConsult
ChiTownConsult

@njmm only if you buy through the exchange are there any taxpayer-provided funds to give to the insurance companies to make up for the difference of the 9.5%

ChiTownConsult
ChiTownConsult

@mom File your taxes.  None of this went into effect until 1/1/2014 for individuals.  Next year if you still do not have health insurance showing on your return the only way the IRS can get any of these penalties, I mean taxes is if you have overpaid.  Hopefully you do not withhold any for payroll and claim 5 or 6 dependents (self, spouse, kids and house but ask your tax advisor) and there's no way for them to collect.  

ChiTownConsult
ChiTownConsult

@Gillygaloo your out of pocket maximum are going to be so high with the ACA plans anyway it would make sense to open an HSA plan with the lowest high-deductible possible in your market area.  All funds to this account (I believe to be $6,750 for 2014) are tax deductible.  The EHB's (essential health benefits) must be in new plans for individuals in 2014 and all pre-existing and other rules apply to these plans including paying for the maintenance (physicals, gyno visits, eye care, dental, etc.) at no charge to the policy holder.  Some high-deductible plans in different states are different but if you're paying that anyway you might as well try to keep premium lowest and fund your health savings account to the maximum.  


If you go over the maximum amount in the year available as a deductible in the HSA; only when that exceeds 10% of your AGI will be deductible but ask your tax advisor.  (sorry need to keep these disclaimers in there)

Hal M
Hal M

@divorced dad 

If your ex has a medical card for the children, may I assume that she was awarded custody of the kids and will provide coverage for them going forward?  If yes, then you will not be penalized for failure to insure them - they are insured.

Hal M
Hal M

@Ter 

Ter, the $285 maximum relates to the maximum paid for all children in the household, so for a family with 10 kids the maximum penalty is $285 vs $470.50 for the uninsured children. 

Hal M
Hal M

@Natallia Parsons 

Natallia, my understanding is that the household income is based on MAGI, so increasing your deductions would be an excellent idea to bring the household income in under the subsidy threshold.

richardosek
richardosek

his is my promise to prophetogwa that when my lover is back am going to tell the whole world about the help he did to my life am happy today is the help of prophetogwa that bring back my lover back to me, my lover left because his mum said he should not marry me because she has some one in her mind to to marry her son and I really lover my man so much there is nothing I could do I cry all days and all night for my lover to come back to me but he never come back, when I was browsing on net I saw many people talking about prophetogwa how he help and restore their partner back I decided to put in try and all thing went for good immediately I contacted prophetogwa on prophetogwa@gmail.com the way he speak to me I was feeling good and better when the spell was cast my lover call me the day prophetogwa tell his going to come and he really come back will are totally married now.what ever your problem is contact prophetogwa is the answer of all via prophetogwa@gmail.com .you will not ever regret contacting him he is the greatest prophet i have ever seen

JohnAd
JohnAd

@ChiTownConsult @njmmWill he get an end of year tax credit, if he keeps his employers coverage?

divorced dad
divorced dad

@Hal M @divorced dad We have joint custody. When my employer stopped providing coverage about 2 years ago, I paid out of pocket for them to have insurance.  My ex had the medical card too.  Last year I could no longer afford the payments, so now they only have the medical card.  Would I get a penalty if I cannot afford to pay for insurance besides their medical card?

BoonvilleKid
BoonvilleKid

@Hal M 

Why doesn't the Federal government remove all of their present regulations on the insurance industry (like the regulation that prevents them from selling across State boundaries) so the insurance companies can be competitive.  This would be much more beneficial to the average taxpayer than all the new confusing regulations and more federal government control.  

Hal M
Hal M

@divorced dad @Hal M 

If the children are, in fact, insured by a government plan, and continue to qualify for government benefits, then you should not be penalized.

divorced dad
divorced dad

@Hal M @divorced dad My ex had the State Medical Card during the time I also paid for private insurance.  She still has the State Medical card.  Since she has this State Medical card for the children, then I would not be penalized for no insurance for them?  Is that correct?

Hal M
Hal M

@divorced dad @Hal M 

I need more information to understand your situation.

1 - If you could not afford the premium and the coverage was canceled, what does the medical card represent?  A member ID card for an insurance plan that has been canceled is worthless.

Is this a medical card for some form of discounted services arrangement?

2 - Are you or your children currently covered under a state Medicaid plan?  If yes, then the answer to your question is simply academic, because you are not subject to the PPACA individual mandate, as you are already covered by a government plan.

pamela33
pamela33


Am now happy happy and happy, my name is Pamela from UK I believe AMINE now, After so many comments on how AMINE helped alot of people got back their Ex, Jobs and properties, i contacted him and tell my story of how a lady broke my relationship, Been married for 8yrs and with 3kids, suddenly my Husband moved out and told me never to contact him again, i was so heart broken, depressed and sad, after all the story,Amine spell temple told me to put my mind at rest and told me that all my problems will be solved within 2days , i was still hoping until Amine called me again for my husbands picture and told me, i will have to get some items and i did all he asked me, on Sunday morning David came home by himself and knelt down to beg me, weeping bitterly and asked for forgiveness, i did forgive him and i told Amine spell temple about everything and he said all he wants from me is to share the good news with the world so people out there , here is a prove that real casters are still online, for any kind of problems that need solutions, contact him:aminespelltemple@yahoo.com