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The Patient Protection and
Affordable Care Act is, by far, one
of the most complex reforms
to our healthcare system and,
whether you are pro or against
it, it comes with rules you should
know about or be prepared to
pay an additional tax.
The April issue of Soar To
Success featured part 1 of this
4 part series where I discussed
my most frequently asked tax
question which is “How much is
the penalty if I didn’t have health
insurance last year.” If you
missed that article, I encourage
you to go back and read it.
The second most common
question I get is
“
What are the exemptions for
the penalties
?”
There are two types of
exemptions you should know
about and they are
regular
exemptions
and
hardship
exemptions. There are a lot
of them and far too many to
name and cover here so I’m
going to discuss some of the
more common ones but be sure
to visit my website for a more
detailed list of exceptions.
One of the most common
reasons for the exemption
is for those taxpayers that
cannot afford health insurance
coverage. A person can be
exempt from the penalty if
the amount they are required
to pay exceeds 8.05% of their
household income. Please note,
I said household income which
means taxpayer, spouse and
any children living in the home
with earnings.
Individuals with income below
the filing threshold are also
eligible for an exemption. If you
don’t have to file, you don’t have
to pay a penalty for not having
health insurance. If an individual
is incarcerated they may also
be eligible for the exemption.
Members of certain religious
sects, citizens living abroad and
certain-non citizens may also
be exempt. Taxpayers with a
short coverage gap, meaning
part 2
Affordable Care Act
Frequently Asked Questions
By Tina Moe, CPA
SOAR TO SUCCESS
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M
ay
2016
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Core Business Strategy