The Affordable Care Act (Obamacare): If You Have Health Insurance

People who do not have coverage in 2014 are required to pay a tax penalty. The penalty is the greater of $695 per year up to a maximum of three times that amount ($2,085) per family or 2.5% of household income.

The penalty will be phased in according to the following schedule:

Year Amount of Penalty

2014 $95 or 1% of taxable income

2015 $325 or 2% of taxable income

2016 $695 or 2.5% of taxable income

Beginning after 2016, the penalty will be increased annually by the cost-of-living adjustment.

Exemptions are granted for:

• Financial hardship
• Religious objections
• American Indians
• People without coverage for less than three months
• Undocumented immigrants
• People in jail
• People for whom the lowest cost plan option exceeds 8% of an individual’s income
• People with incomes below the tax filing threshold (in 2009 the threshold for taxpayers under age 65 was $9,350 for singles and $18,700 for couples)

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