Health Insurance Tax Penalties: How will they be determined and paid?
The first penalties will be reported on your 2014 tax return that will be filed in 2015. The penalty will be determined by calculating the greater of either a flat dollar amount or a set percentage of income. The annual penalties are phased in from 2014 to 2016 as follows:
- 2014: Greater of $95 per adult and $47.50 per child under age 18 (maximum of $285 per family) or 1% of income over the tax filing threshold.
- 2015: Greater of $325 per adult and $162.50 per child under age 18 (maximum of $975 per family) or 2% of income over the tax filing threshold.
- 2016: Greater of $695 per adult and $347.50 per child under age 18 (maximum of $2,085 per family) or 2.5% of income over the tax filing threshold.
If the penalty applies for less than a full calendar year, the penalty will be pro-rated on a monthly basis.