Calculating the payment
For 2016 and 2017, the full payment is $695 per person, $347.50 for each child, up to a maximum of $2,085 — or 2.5% of your household income, whichever is higher.
However, for 2018, the shared responsibility payment is still calculated on the 2018 tax return. The TCJA does not eliminate the penalty until tax year 2019. The penalty for a taxpayer who did not have health insurance for 2018 is $695 per adult, or 2.5% of income over the filing threshold, whichever is greater.
The employer shared responsibility payment is a tax penalty imposed on businesses with 50 or more full-time equivalent employees if the businesses don’t offer affordable health insurance benefits, or if the benefits offered do not provide minimum value.
Under the new law, California residents who do not have coverage for themselves and their dependents in 2020, and who do not otherwise qualify for an exemption, will pay an Individual Shared Responsibility Penalty when they file their 2020 California income tax returns in 2021.
If you are not required to file a federal income tax return for a year because your gross income is below your return filing threshold, you are automatically exempt from the shared responsibility provision for that year and do not need to take any further action to secure an exemption.
Shared responsibility: Collaboration between two or more persons or bodies performing the same kind of activity in the creation of the content of an item.
To avoid a penalty, you will need qualifying health coverage for each month beginning on January 1, 2020 for: Yourself. Your spouse or domestic partner.
- Have qualifying health insurance coverage.
- Obtain an exemption from the requirement to have coverage.
- Pay a penalty when they file their state tax return.
For any month during the year that you or any of your family members don’t have minimum essential coverage and don’t qualify for a coverage exemption, you are required to make an individual shared responsibility payment when you file your tax return. The payment is reported on Form 1040.
Do you still need proof of medical insurance to file taxes 2020?
Proof of Insurance
You are not required to send the IRS information forms or other proof of health care coverage when filing your tax return. … Records of advance payments of the premium tax credit. Other statements indicating that you, or a member of your family, had health care coverage.