If you’re uninsured, you may qualify for a health insurance penalty exemption. Nearly three in four uninsured TurboTax filers have claimed an exemption from the individual health care mandate tax penalty as of Jan. 31, according to new data TurboTax released today. The top reasons for exemption claims?
- Affordability under IRS income guidelines of health plans in a taxpayer’s area or through their work place
- Hardship exemptions such as eviction and a recent death of a close family member
The penalty for having gone without health insurance in 2015 is $325 per adult and $162.50 per child (up to $975 for a family) or two percent of household income, whichever is greater. To date, 70 percent of uninsured or partially insured TurboTax users claimed an exemption from the individual mandate tax penalty. This number is in line with last year’s overall tax season data.
The IRS reported that about 300,000 people who paid the penalty likely qualified for an exemption last year. With the penalty nearly doubling this year, TurboTax is urging those without health coverage to see if they qualify for an exemption from a tax penalty. The good news is that TurboTax automatically gives you affordability exemptions based on information in your tax return if you are eligible. You may also apply for one of the many exemptions not given through your tax return by going to your state Marketplace or to the Health Insurance Marketplace.
New health insurance forms should not delay tax filing
Eight out of 10 taxpayers have health coverage through an employer, a government program such as Medicaid, or other private insurance and may get a new 1095-B or 1095-C form this year. According to the IRS, most taxpayers don’t need to wait to receive these forms to file their taxes nor do they need to attach this information to their return. Taxpayers may simply “check a box” if they had coverage for the full year, quickly and easily satisfying their reporting requirement. If taxpayers do receive a 1095-B or 1095-C, they should review the form for accuracy and save the form with their other tax records. TurboTax hasn’t seen significant delays in tax filing due to new health insurance forms 1095-B or C.
Like last year, people who purchased health coverage on a Health Insurance Marketplace should have received Form 1095-A, which confirms their coverage, premiums and any subsidies they might have received. Entering 1095-A information in TurboTax is as simple as entering a W-2. These forms are needed for filing and being able to maintain premium assistance into 2017. Form 1095-A can be accessed through healthcare.gov or state Marketplaces.
Tax time also presents an ideal opportunity to review and update current income. The TurboTax Income Estimator can help ensure Marketplace premium tax credits are accurate for 2016.