What is Tax Penalty For No Health Insurance?
Have you ever heard about tax penalty for no health insurance? Some of you may be not familiar with the term of tax penalty for no health insurance. Why? It is because some of you may think that taking health insurance or not is a right of every person. If so, why is there any tax penalty for no health insurance? Find the answer below.
Tax Penalty For No Health Insurance
In America, most Americans buy health insurance because The Affordable Care Act (ACA) requires Americans to buy health insurance. If an American doesn’t want to buy health insurance whereas he is able to buy it, he will be asked to pay for tax penalty. Sometime, tax penalty called as Obamacare penalty. Who should pay for tax penalty for no health insurance? Actually, you have to pay for tax penalty whenever you don’t buy health insurance for three full of consecutive months.
For example, you don’t have health insurance since January until February. And then, you buy health insurance in March. It means you don’t have to pay tax penalty. But if you don’t have health insurance for 3 full of consecutive months, you have to pay tax penalty. So, make sure you buy health insurance if you are able to buy it. If you can’t do that, you have to pay tax penalty.
How much is tax penalty for no health insurance? People usually want to know about it. Actually, the penalty depends on total household adjusted gross income. In 2017, the penalty is 2.5%. It means that 2.5% from household adjusted gross income. In other word, you have to pay $347.50 per child, $695 per adult, maximum of $2,085. So, buying health insurance will be more effective compare to paying tax penalty. If you don’t buy health insurance for long time, it means the tax penalty will be so high.
Exemptions From Tax penalty For No Health Insurance
Although person who don’t have health insurance should pay for tax penalty, but a person don’t have to pay for it if the coverage cost more than 8.13% of his household income. For people who were uninsured for less than consecutive months, they don’t have to pay for tax penalty too. So, learn about exemptions from health insurance penalty before you worry about tax penalty.
People who have very low income don’t have to pay for tax penalty too. As mentioned before, tax penalty should be paid by people who are able to buy health insurance, but they don’t buy it. If your religion forbids you to use insurance, you don’t have to pay for tax penalty too. Other people who don’t have to pay for tax penalty are people in prison, people who belong to health care sharing ministry, people who are in other country for more than 1 year, and people who face serious problems such as bankruptcy, homelessness, eviction, and many more.
Well, those are some information for you. We can conclude that not every person should pay for tax penalty. But if you are able to buy health insurance, you are better to buy it as soon as possible before you should pay for tax penalty for no health insurance.