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What happens if I can't pay the tax penalty for not having health insurance?

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What happens if I can't pay the tax penalty for not having health insurance?

Postby faerwald » Thu Jul 05, 2012 2:38 pm

I'd love to have health insurance for my wife and three kids. But as it is now and has been for the last few years we can barely pay our bills and literally have to skip meals sometimes. I understand the penalty for not having health insurance for a family the penalty would be $2,085 or 2.5 percent of household income, whichever is greater.
We also somehow make too much money for Government assistance in any form (not even food stamps!). I looked into insurance prices and they are quite a bit higher than the tax penalty.

I'm assuming if I can't pay that extra tax penalty, it would be treated like any other debt to the IRS and they will garnish my wages. But what if we have no regular paycheck for them to garnish?
Also is my assumption wrong? Is there different penalty for those who can't this specific tax penalty?
faerwald
 
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What happens if I can't pay the tax penalty for not having health insurance?

Postby mahoney » Thu Jul 05, 2012 2:43 pm

If you don't have health insurance for your family in the past why are you soo worried about the penalty? Shouldn't you be worried about Not having insurance & taking a risk on your family & finances?
The law doesn't take affect till ... 2014. By then there will be a lot of options & you will be able to choose from what you can afford.
BTW...just for your info. if you have an income of $50K. & you don't get health insurance..your penalty will be $500. Any intelligent person would rather pay their premiums & have health insurance then get a $500K + hospital bill if they get sick & can't afford it.
The price of insurance (premiums) will Drastically go down..by 2014..because there will be more people getting insurance & the insurance companies will not have monopoly on whatever they say goes.
The free loaders with no health insurance..using the emergency room make Health care Expensive for all of us.
Don't you think they should pay for their lard ****s ?
mahoney
 
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What happens if I can't pay the tax penalty for not having health insurance?

Postby colyn » Thu Jul 05, 2012 2:51 pm

Your assumption is wrong. There would not be the same penalty. There would not be a different penalty. There would be no penalty.

There is only a penalty if someone can afford insurance and does not get it. If a person cannot afford insurance, then there is no penalty.
colyn
 
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What happens if I can't pay the tax penalty for not having health insurance?

Postby bruce » Thu Jul 05, 2012 2:55 pm

In 2014, the tax penalty for not having health insurance would be $285 per family or 1% of income, whichever is greater. This increases a bit in 2015 and then starting in 2016 it’s $2085 per family or 2.5% of income. However, if your income is so low that you don’t have to file a tax return, then you are exempt from the tax penalty.

If you do want to purchase health insurance in 2014 and you don’t qualify for Medicaid, you may qualify for subsidy assistance from the government. The amount of the subsidy will vary depending on your income, but people making up to 400% of the federal poverty level may qualify. If your income is at the very lowest qualifying level, the government subsidy will come in to make sure that you don’t pay more than 2% of your annual income towards coverage. If your income is in the higher-qualifying range (up near 400% of federal poverty level), the subsidies will make sure you pay no more than 9.5% of your annual income towards coverage.
bruce
 
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What happens if I can't pay the tax penalty for not having health insurance?

Postby enock » Thu Jul 05, 2012 3:05 pm

An adult who does not have health insurance by 2014 would be penalized $95 or 1 percent of income, whichever is greater, SO LONG AS THE AMOUNT DOES NOT EXCEED THE COST OF A BASIC PLAN. But by 2016, the penalty increases to $695 for an uninsured adult, and up to $2,085 per household, or 2.5 percent of income, whichever is greater.

It makes more financial sense to go ahead and buy the insurance from the exchange in 2014 and get a tax credit. You may qualify for a hardship exemption if you are low income. You could not possibly know what the insurance premiums will cost since the exchanges are not set up yet until 2014.

Here is the subsidy calculator to give you an idea of the cost of the insurance if you make under $88K per year.

ZARNEV: The IRS is not hiring 16,000 agents. It is 4,000 and they will process the tax credits mainly.
enock
 
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What happens if I can't pay the tax penalty for not having health insurance?

Postby murchadh » Thu Jul 05, 2012 3:15 pm

This is why the act authorized 16,000 new IRS agents - to make sure your debt to the IRS will get paid.

Those who think your health insurance premium will go down are delusional. However, you will get a credit to help pay your premium. The way this will work is you'll purchase your insurance and when you file your taxes at the end of the year you'll get a credit.
murchadh
 
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