Whoopie!! Filed my taxes today and paid my ACA non-compliance penalty of over $500, taken out of my refund. Alas, such is the cost of freedom for rebelling against an oppressive government attempting to coerce me to buy a product from a private company just because I am still alive. It feels so good knowing that my 30% tax rate is not enough to help all of the downtrodden in our country, including illegal immigrants and refugee resettlement. I feel so patriotic that I can hardly stand it. Yeah, I was laid off from Chevron, but I am single and free. Ok, I am done with my rant. Whew, I feel so much better now. Time for a cold brewski and a doobie.
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The ACA individual mandate penalty was eliminated by Trump’s Executive Order signed in 2018, which became effective Jan 1 2019. But, I understand the individual mandate in the law itself was recently eliminated by Congress in 2019 as part of the latest spending bill. It was signed by President Trump. This part of the ACA law is now permanent. There will be no box to check on the 1040 tax return. Everyone is now free to go uninsured and not be penalized by the IRS.
How did this all work out?
Any cheap healthcare insurance hacks for the Class of 2020 group to be fired?
It's too late for the previous poster, gtqj. If you file an amended return with the IRS, you will be calling much attention to yourself and it will be scrutinized closely. You won't be able to "undo" the claim. If you are going to cheat and claim you had a full year insurance coverage on the 1040, the best way is to file the paper form and simply check the little box on Line 61. Don't use tax software or file electronically. Your chances of being audited are extremely low, especially with the executive order signed by Trump. Sweet.
https://turbotax.intuit.com/tax-tools/tax-tips/Taxes-101/How-to-File-an-Amended-Return-With-the-IRS/INF14402.html
I could have lied and checked line 61 that I did have insurance for the full year. But now, I can indicate that I did not have insurance for the full year and leave the calendar months of no insurance blank (all 12 months). The IRS will now accept this return. Before, the IRS would reject this filing because it did not know how many months you did not have coverage and therefore, no penalty amount could be calculated. The whole point is that tax software does not allow all 12 months to be blank, even though current IRS rules will allow it. You end up having to lie and claim you had insurance for the entire year. I hope this makes sense to everyone who might have had one or more months without health insurance last year. Again, check the software for updates to accept this change.
That's an interesting observation, emaa. I have always completed and filed my 1040 tax returns on the printed paper form, even after first doing so online with TurboTax or TaxAct software. If you observe the 1040 form closely, I think all you need to do is go down to line 61 (Health care) and check the little box for "Full-year coverage". That should do it.
If you had Obamacare coverage during 2016 and took the advance premium tax credit to lower your monthly premiums, it's easy to avoid or overlook Line 46 and attaching Form 8962 with your tax return. Do so at your peril, but when doing your taxes on the 1040 paper form, it's an easy excuse to say you overlooked that line when completing your return. It won't be overlooked if doing your taxes using a software program. I know the IRS is understaffed and your chances of being audited is less that 1/3 of 1%.
Yeah, I obviously should have waited. Here is how the new tax filing works. There is a section on the tax form where you specify how many months you had health insurance for 2016. If this is deliberately left blank, the tax filing is rejected by the IRS. So, you have to check the months that you actually had coverage. In my case it was 3 months. The new procedure is that if you deliberately leave this part of your tax return blank, then the IRS will accept your return. For Credit Karma and TurboTax, their software requires at least one month be checked as having health insurance and it will automatically deduct the penalty (tax) for uninsured months from any refund. You need to make sure your tax software is correct. The same is true for any income tax service like H&R Block, etc.
-eank (aka OP), You may have been premature in filing your taxes too early and should have waited a bit longer. It's very likely a person who didn't have an insurance may just get off without having to pay the non-compliance penalty. The Trump executive order tells all Federal agencies to "fiscally" stand down. That might mean the IRS will not pursue a person in your position for the penalty, even holding it back from any refund that is due. But, until further clarification, that's to be seen. It's well worth waiting up to April 15 to see if further proof for this is made true. I can tell you with certainty, however, that if you had no tax refund coming, you could legally get away without paying a non-compliance penalty. The ACA did not give authority to the IRS to pursue anyone, garnish their pay or sue them for non-compliance. The IRS only has authority within its own rules to withhold the penalty from any refund amount that was owed to you. For anyone who did not have a full year of insurance coverage in 2016, it would be in your best interest to wait until April 15 before filing your taxes and in the meantime do your research by looking into reliable sources of information on the subject.
OP Nimrod here. I read some news this morning that the IRS will no longer be enforcing the ACA noncompliance penalty on tax returns pursuant to executive action taken by Trump in January. Tax software companies are currently working on updating their software to no longer subtract penalty from refunds. I guess I am just screwed out of $500. Let my experience be a lesson to everyone else who did not have health insurance for the entire tax year of 2016. Make sure your tax software is up to date. I don't know if I have any recourse at this point. I will post a message here if something positive happens.
got axed from a chevron competitor, cobra offered was 10X my employee premium for family coverage. No way I will do that. Anyone checked out the healthcare sharing organizations like Medi-share or Samaritan?
"not an ordinary $500 bill. It's a TAX" ... I guess that would be the first time you ever had to pay a tax?
@3lfo, you say complaining about a $500 bill sounds poor? This is not an ordinary $500 bill. It's a TAX. I make it a point to complain about paying a tax I shouldn't have to.
Anyone complaining about a $500 bill sounds poor. They should have their right to vote stripped away.
I'm an ex employee from Dec 2015. I can understand the continued aggravation of a few prior posters. I'm still pissed too, but it's mostly due to knowing who the company kept in place after I was laid off. Honestly, it's the poor leadership and decision-making of many in management and the political correctness in Chevron that will not allow the company to be better than it is.
OP I guess you do not have the needed points to qualify for a CVX retiree health plan? Yes they are expensive but better than ACA Obamacare plans. I decided to go with the CVX plan I had when an employee and am paying $1157 vs about $350 a month when employed. That's an $800 a month premium for being retired which not good, but I still need the family plan.
@rhp yea the COBRA plan was awful...I was a pissed off ex employee maybe I still am. Mostly it was looking at who was staying that aggravated me.
OP here. Yeah, I know I'm a nimrod. The cobra was outrageous and the ACA plans all s---ed the big schnitzel. I did online with credit karma and TurboTax and got the same result. I could have lied about my yearly coverage, but your employer sends this info to the IRS. I didn't want to take a chance getting busted. I'm not certain about the EO thing. Maybe this is for next years fiking for 2017. My $500 contribution to ' the cause' might help subsidise one person. I got the cut from MCBU last April. I am not a troll, just a pissed of ex employee. Stupid socialist democrats.
OP, you may have not had to pay that ACA penalty, nimrod! Trump signed an Executive Order last week ordering all agencies connected to Obamacare to stand down from enforcing the fiscal regulations of the Act. That means the order must also be obeyed by the IRS, who should not be penalizing you for not having insurance. I think you acted too quickly in doing your taxes so soon. If you felt compelled for some reason to file your return this early, you should have at a minimum filed your return using the paper based form and checked the little box on Line 61 of the 1040 stating you had a "Full-year coverage" of insurance coverage (be it true or not). Aside from the stand down orders from the President, let it be known the IRS is way understaffed and most any person making under $200,000 a year has only a 1/3% chance of randomly being audited.
Troll
GTFO