We are only weeks away from one of the most important and controversial aspects of the Affordable Care Act. According to the health reform law, Americans must maintain minimal essential health coverage by January 1, 2014 or face a penalty that will be collected by the IRS. As the date quickly approaches, it is important to know the facts about the IRS and the Affordable Care Act.
Four Things You Should Know by December 31, 2013
The relationship between the IRS and the Affordable Care Act is still evolving. However, as of now, we know that:
- It is the IRS’ job to collect the penalty for individuals who do not have health insurance.
- The 2014 penalty is set to be $95 per adult and $47.50 per child with a maximum penalty assessed at $285 per family or 1% of household income, whichever is greater. Those penalties are currently scheduled to increase significantly in 2015 and 2016.
- You will need to provide sufficient documentation of your health insurance coverage or proof that you are exempt from having to purchase such coverage with your tax return in order to avoid the penalties.
- The IRS’ ability to enforce the penalty may be limited.
Stay Up to Date on the IRS and Affordable Care Act Issues
It is important to stay up to date on IRS and Affordable Care Act issues in the coming months. Accordingly, we encourage you to check our website regularly, and we invite you to learn more about all sorts of tax issues in our FREE book, The Ultimate Survival Guide for IRS Problems.