PO Box 1180, Templeton, CA 93465
Health Care Act
The FEDERAL Health Care Mandate (Obamacare) is gone. Starting in tax year 2019 there is NO penalty for not having health insurance identified on your tax return.
HOWEVER, if you signed up for coverage with the Affordable Care Act in any state that provides access to the insurance you will have to continue to report that on your return.
If you have insurance through any of the exchanges you will receive a form 1095-A. You will need this form to file your tax return and take advantage of the Premium Tax Credit.
If you have health insurance through your employer you may receive a form 1095-B showing that you are covered.
NEW HEALTH INSURANCE MANDATE FOR CALIFORNIA RESIDENTS
Beginning January 1, 2020, California will impose penalties generally equal to $695 per adult against California residents who do not have minimum essential health care coverage for the entire year. The penalty for a dependent child is half of what it would be for an adult.
A typical family of four or more persons that goes uninsured for the whole year would face a penalty of at least $2,000. However, for higher income adults/households, the penalty can be as much as 2.5% of household income above certain thresholds, so a household with $500,000 of household income can face a penalty of close to $10,000.
If you do not have adequate health insurance coverage during the 2020 tax year, the penalty will be imposed, although it does not have to be paid until you file your 2020 tax return.
If you do not have health insurance through your employer, you can sign up for health care coverage online at Covered California. WWW.COVEREDCA.COM. 800-300-1506.
Subsidies available
California is providing subsidies to assist taxpayers who purchase health care coverage through Covered California website. Subsidies are available to people whose household income is at or below 600% of the federal poverty line (600% of the federal poverty line is equal to $74,940 for a single person, and up to $154,500 for a family of four).
Exemptions
Many taxpayers can avoid the penalty if they qualify for an exemption from the requirement to obtain health care insurance coverage. Common exemption examples include, but are not limited to:
- Coverage is unaffordable (you must meet specific requirements);
- You’ve experienced a severe hardship (e.g., homelessness, eviction, bankruptcy, domestic violence, illness or death in the family, etc.); or
- You have a short-term coverage gap (three months or less) due to switching jobs.
Most of the exemptions are the same ones that applied under the federal Affordable Care Act.
Although this new health care mandate will not impact the filing of your 2019 tax return, make sure to get coverage as soon as possible to avoid the penalty when we file your 2020 return. Open enrollment through Covered California ends January 31, 2020.