NEW YORK (CNNMoney) — Were you uninsured in 2014? It’s time to pay the piper!
Some 3 million to 6 million Americans will have to pay an Obamacare tax penalty for not having health insurance last year, Treasury officials said Wednesday. It’s the first time they have given estimates for how many people will be subject to a fine.
The penalty is $95, or 1% of income above a certain threshold (roughly $20,000 for a couple). So you could end up owing the IRS a lot of money.
Take a married couple with $100,000 in income – their bill comes to $797, according to the Tax Policy Center ACA penalty calculator.
The penalty for remaining uninsured rises to the larger of $325 or 2% of income in 2015.
As millions of Americans sit down in coming weeks to compile their tax returns, they’ll have to contend with Obamacare’s health insurance mandate for the first time.
Some three-quarters of the nation’s 150 million taxpayers have health insurance through their jobs or government programs and will simply have to check a box on the Form 1040.
Another 15 million to 30 million people will request and be granted an exemption to the mandate by filing Form 8965. Those who aren’t subject to the insurance requirement include undocumented immigrants, low-income Americans and those for whom insurance premiums were more than 8% of their household income.
Finally, between 4.5 million and 7.5 million taxpayers received subsidies for insurance premiums when they signed up for coverage on Obamacare exchanges. They will have to use Form 8962 to reconcile their actual 2014 income with the amount they estimated when they applied for a policy in late 2013 or early 2014.
Those who underestimated their income either will receive smaller tax refunds or will owe the IRS money.
Treasury officials declined to forecast how many people may be in this situation. But H&R Block projects 3.4 million taxpayers will have to pay back part of their premiums.
Of course, those who overestimated their 2014 income may get a healthier-than-expected refund. And some will see no change.