The Affordable Care Act of 2010 introduced the shared responsibility payment on non-exempt American citizens who do not meet certain healthcare insurance minimum coverage requirements. The IRS will not consider a return complete and accurate if the taxpayer does not report health care coverage for the year, an exemption or a payment.
Taxpayers must either:
- Have qualifying health care coverage for every month of 2016 (including for dependents);
- Qualify for an exemption from the requirement to have health care coverage; or
- Make a “shared responsibility payment.”
This shared responsibility payment increases annually, and for the 2016 tax year, is the greater of:
- $695 per adult and $347.50 per child (to a maximum of $2,085 for a family); or
- 2.5 percent of the taxpayer’s household income in excess of the tax return filing threshold for his filing status.
For any taxpayers filing delinquent tax returns for the 2015 tax year, the shared responsibility payment is the greater of:
- $325 per adult and $162.50 per child (to a maximum of $975 for a family); or
- 2.0 percent of the taxpayer’s household income in excess of the tax return filing threshold for his filing status.
Taxpayers who have qualifying health care coverage for all 12 months of the year will check the “Full-year coverage” box On Form 1040, 1040A or 1040EZ. A taxpayer is not required to make a shared responsibility payment for any month that he or she or any family member claims an exemption from the requirement to have minimum essential coverage. Taxpayers who are not otherwise required to file a tax return do not need to file a return for the sole purpose of reporting coverage or claiming an exemption from coverage.
It is wise to consult with an experienced and knowledgeable tax professional to help any taxpayer in the New York or Tri-State area, whether an individual or business, assess their current tax situation looking ahead to the future. If you have any question about taxes, especially in planning ahead for the next filing season, call THE TAX EXPERTS at the Thorgood Law Firm www.thorgoodlaw.com. For a FREE consultation call 212-490-0704.
