(Bloomberg) -- As many as 6 million U.S. taxpayers will have to pay a penalty of as much as 1 percent of income because they went without health insurance in part or all of 2014, the Treasury Department said.
The penalty, part of the Patient Protection and Affordable Care Act, is designed to encourage people to sign up for health insurance using the expanded options and financial assistance available under the law, known as Obamacare. The penalty would apply to about 2 percent to 4 percent of all taxpayers for 2014.
Tax filing for 2014 opened Jan. 20, and the Internal Revenue Service’s Form 1040 -- for federal income tax -- includes a new Line 61 asking if the taxpayer has health insurance. Three-quarters of taxpayers won’t have to do anything more than check that box, said Mark Mazur, the department’s assistant secretary for tax policy. The remainder will have to to take additional steps, though most won’t pay a penalty, he said on a conference call with reporters.
The IRS has been preparing for additional strain during the tax season as people adjust to the rule, warning that about half the people who call its toll-free phone lines won’t be able to get through.
About 3 percent to 5 percent of taxpayers got tax credits last year to help afford their premiums on Obamacare insurance plans, Mazur said. Ten percent to 20 percent weren’t insured for all or part of the year but will be able to claim an exemption. People who owe a penalty “will pay a fee because they made a choice not to obtain health insurance that they could have afforded, and they’re not eligible for one of the exemptions,” he said.
The government will issue about 4 million new tax forms, called a 1095A, to people who received the tax credits, Kevin Counihan, the CEO of healthcare.gov, the federal insurance exchange, said on the call.
The tax penalties start at $95 and can be as much as $12,240 for a wealthy family.
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http://www.bloomberg.com/news/articles/2015-01-28/obamacare-penalty-to-be-owed-by-as-many-as-6-million-taxpayers
