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July 5, 2012

IRS documents

Citizens Must Purchase Health Insurance or Pay the IRS

The Patient Protection and Affordable Health Act requires U.S. citizens to purchase health insurance or pay the Internal Revenue Service, beginning Jan. 1, 2014.

Individuals who don't purchase health insurance must pay a penalty of $95 in 2014; $325 in 2015 and $695 in 2016. After 2016, the flat dollar amount is indexed to inflation. The penalty is capped at 300 percent of the flat dollar amount.

U.S. citizens who don't purchase health insurance will have to pay the penalty as a tax liability on their income-tax returns.

Exemptions will be granted for financial hardship, religious objections, Native Americans, those without coverage for less than three months, undocumented immigrants, incarcerated individuals, those for whom the lowest cost plan option exceeds 8 percent of the individual’s income and those with incomes below the tax-filing threshold. In 2009, the threshold for taxpayers under 65 was $9,350 for singles and $18,700 for a couple, reports the Henry J. Kaiser Family Foundation.

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