Under Affordable Care Act, the IRS will provide tax breaks and incentives to help pay for health insurance and impose penalties on some people who don’t buy coverage and on some businesses that don’t offer it to employees.
- Those who don’t get qualified health insurance will be required to pay the penalty — or tax — starting for the 2014 tax year, unless they are exempt because of low income, religious beliefs or because they are members of American Indian tribes.
- The penalty will be fully phased in by 2016, when it will be $695 for each uninsured adult or 2.5% of family income, whichever is greater, up to $12,500. The nonpartisan Congressional Budget Office estimates that 4 million people will pay the penalty that year.
- There are no civil or criminal penalties for refusing to pay it and the IRS cannot seize bank accounts or dock wages to collect it. No interest accumulates for unpaid penalties. The law allows the IRS to withhold tax refunds to collect the penalty, and most filers get refunds. This year, 77% of the 135 million individual income tax returns processed by the IRS qualified for a refund. The average refund: $2,707.
- For those who don’t qualify for a refund, a stern letter from the IRS can be effective, even if it doesn’t come with the threat of civil or criminal penalties.
For full article see: Can IRS manage to police taxes and health care law? – USATODAY.com.
- IRS gearing up for new responsibilities in health care (bottomline.msnbc.msn.com)
- The tax man cometh to police you on health care (news.yahoo.com)