Owe the IRS money? Good news

www.marketwatch.com ^ | Feb 2014

[dennisw]

The Obamacare penalty only applies to those who get a tax refund

Starting this year, the Obamacare law imposes a penalty on individuals who fail to have so-called minimum essential health insurance coverage for any month. This coverage requirement is commonly called the individual mandate, and the penalty is the cost for failure to comply. As you will see, however, the penalty lacks teeth, so many folks will probably choose to blow off the individual mandate. In any case, here’s what you need to know about the penalty.

Penalty basics

You will owe the penalty if you don't have minimum essential coverage for yourself and your dependents. Minimum essential coverage includes certain government sponsored programs (e.g., Medicare, Medicaid, and the Children’s Health Insurance Program), eligible employer-sponsored plans, plans obtained in the individual market, certain grandfathered group plans, and other coverage specified by the Feds. However, if you fit into one of the following categories, you are exempt from the penalty.

Your 2014 household income is below the federal income tax return filing threshold (generally $10,150 for singles, $20,300 for married joint-filing couples, and $13,050 for heads of households). Your existing health insurance plan was canceled. You are considered to lack access to affordable minimum essential coverage. For example, coverage under an employer-sponsored plan is considered unaffordable if your required monthly contribution exceeds 8% of household income. You suffered a hardship in obtaining coverage. To qualify for this exception, you should obtain a hardship exception certificate issued by an Insurance Exchange. You have only a short coverage gap. You qualify for an exception on religious grounds. You aren't a U.S. citizen or national or you are in the U.S. illegally. You are incarcerated. You are a member of an Indian tribe.

Penalty specifics

[dennisw]

so is if you are not getting a tax refund then there is not Obamacare penalty?

The only way the penalty is collected is from tax refunds?

[Gaffer]

Back when, my interpretation of the situation was that the IRS cannot collect the ‘penalty’ because it isn’t a tax, per se, even though CJ Roberts said it was so he could explain his (IMO) criminal duplicity.

What that meant, IIRC, they aren’t legally authorized to collect because it isn’t an income tax matter, but they can withhold any amount you are due as funds owed the government.

I honestly don’t know if this is still operative, however.

[eyeamok]

Sorry, not true and NO ACCOUNTANT will file a return without the TAX listed.

I paid my Obamacare Tax on Monday $1777.00, Yes I am one of those greedy self employed business owners that gets to pay Half of my employees TAXES as well as my own.

[dennisw]

So refund or no refund you must pay the Obama care penalty if you don’t buy the health care coverage demanded?

[eyeamok]

If you are self employed and do your own taxes, you might get away with it, but I doubt it. You will be audited. But I guarantee, you will NOT FIND an Accountant to NOT CLAIM the TAX.

[Mr. K]

I suddenly discovered I was Amish, and so exempt

Or muslim... one of those.

[combat_boots]

I know someone with a mushroom in the basement. Because the mushroom is not employed, the tax had to be paid. Refund or no.

[butlerweave]

garnishment of your other money

[dennisw]

Thanks!

[NonValueAdded]

FALSE. The penalty is calculated and sits there awaiting collection. Only PART of the IRS collection toolkit is ruled out by the Act. No liens or levies. But sooner or later you will be getting a payment from the US Treasury and the offset program will collect that fine.

Also note there are no holds barred on the payback of the Advanced Premium Tax Credit (when you under-estimate your earnings at the start of the policy or get stuck with MFS filing status).

[CodeToad]

Cruz is on record proclaiming that if we give the eGOP the Senate they would repeal ObamaCare. Instead, they funded it.

[bigbob]

Seems right. Since the IRS was put in charge of the program it seems that this would be an automatic compliance audit flag.

[dennisw]

Thanks!

[eyeamok]

Any CPA that doesn’t claim the TAX will most likely have Enforcement proceedings taken against them, they are REQUIRED to List It or lose your license. I tried for the last 2 years, and my Accountant says NOT A CHANCE. So it may not be enforceable, but they gonna get paid no matter what.

[eyeamok]

ya know, you could always be that Special Test Case that goes all the way to the supreme Court, but can you handle the LOSS of everything while you do it??

[angcat]

Yes!

[DiogenesLamp]

Cruz is on record proclaiming that if we give the eGOP the Senate they would repeal ObamaCare. Instead, they funded it.

I think a lot of us made that same mistaken assumption. We literally did not realize the degree of treason and contempt present in the Republican party.

It wasn't until McConnell woke me up by funding those deliberately Racist attacks on Chris McDaniel in Mississippi that I realized they aren't trying to solve anything. They are just trying to keep from rocking the Washington-New York power corridor.

[WHBates]

"Cruz is on record proclaiming that if we give the eGOP the Senate they would repeal ObamaCare. Instead, they funded it.

So, you blame Cruz for that? Brilliant

[Cboldt]

I think your take is correct. The only thing the law cut-off was collections. The money is due, the tax applies. But the IRS is precluded from garnishment and otherwise forcibly taking the funds.

I also think the amount of tax money at stake, that is actually "not paid," will be so small that there won't be any cases. The IRS won't even bother looking for the money.