ACA Tax Penalty Calculator

[RayNY]

For reference, the wording refers to a "Greater of $xxx flat fee or x.xx% fine on income above the tax filing threshold."($95/1% this year) Of course, that threshold is highly variable.

http://www.irs.gov/pub/irs-pdf/p501.pdf Page 2 for the threshold chart, 2013 edition.

Married, filing separately, is just $3,900/person. That be a 1% fine on each person's income over $3,900, right? Neat way to sneak an extra $120/year out of those darn separately filing spouses.

Filing jointly is $20,000, widower with a child is $16,100.

 

[Yagents]

I'm not going to look through the document, but if you make less than $10,000 then you are not required to file taxes

 

[cadylou]

Kaiser published this today.

FAQ: What Are The Penalties For Not Getting Insurance? - Kaiser Health News

 

[RayNY]

Yagents, whether you look at the IRS document or not, the fact is, you ARE required to file taxes if your income is under $10,000 in certain situations. Additionally, there are some scenarios where you can make $10,000 or more and NOT have to file. I go out of my way to post direct links, and mention the page to refer to, to save everyone here the time of having to look for the official reference.

The link Cadylou posted does mention some of these scenarios, but it didn't include the potential biggest penalty generating "married filing separately" scenario.

 

[Yagents]

Sorry, missed the reference to page 2.

either way, whether required to file or not, the first $10,000 (or equivalent threshold) is taken off income first to calculate the penalty

 

[RayNY]

Yes, now you're on board!

The best way to think of it is "the penalty is 1% of household MAGI above the applicable filing threshold".

Of course, we have a simple reference for those thresholds. IRS hasn't released 2014 guidelines yet, but judging by the Kaiser link, it looks like a roughly 1.5% increase over the 2013 guide I posted.

 

[Yagents]

Ok, so I'm confused. Is the penalty of 1% of income on EACH family member??
So a family of 5 making 300k, would have to pay 3k per person X 5 up to the max price of bronze plan?

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Federal officials have capped the amount of money scofflaws will be forced to pay if they don't buy insurance this year at $2,448 per person and $12,240 for a family of five.

The amount is equal to the national average annual premium for a bronze level health plan. But only those with an income above about a quarter of a million dollars would benefit from the cap. Those making less would still have to pay as much as 1 percent of their annual income.

Feds cap fines for not buying health insurance

 

[RayNY]

Yagents,

26 U.S. Code § 5000A - Requirement to maintain minimum essential coverage | LII / Legal Information Institute <full text of the law on penalties. It's worth a read-source is always better than interpretations.

That said, here's my interpretation.

-Flat fee is per member (1.0 for primary, .5 for dependents, capped at 3.0), percentage is per household
(section (3)(a) "if an individual...is a dependent of another taxpayer...such other taxpayer shall be liable for such penalty..) and (2)(b)"...an amount equal to the following percentage of the excess of the taxpayer's HOUSEHOLD INCOME for the taxable year..."
-A single person in the household not complying=penalty on whole household.
(b)(1) "If a taxpayer..or an applicable individual for whom the taxpayer is liable..fails to meet the requirements..there is hereby imposed on the taxpayer a penalty...")

Hope that clarifies things