From the Hook Law Firm:
Most people understand that the individual mandate set forth under the Affordable Care Act requires us to, absent an exemption, maintain minimum essential health insurance. Failure to inform the marketplace that you have healthcare coverage or are exempt from coverage by January 2014, absent transition relief of a non-calendar year plan, will subject you to a penalty on your 2014 federal income tax return. The tax penalty for failing to maintain the minimum essential health insurance is at least $95 per individual in 2014, and set to increase to no less than $695 per individual in 2016. If you are not otherwise required to file a 2013 income tax return, there is no additional filing requirement to establish your future eligibility and assistance to purchase healthcare coverage through the exchange; however, if you do not obtain coverage, a form provided by the IRS to be filed with your 2014 return will document your payment penalty.
Under the new provisions, individuals earning under $15,281.70 in income or a family of four with income under $31,792.50 may now qualify for Medicaid in those states who opted for expanded coverage. To offer further relief, an individual or family may be eligible for the Premium Tax Credit, which may be applied to monthly insurance premiums or that year’s tax return, if total income is between 100 and 400 percent of the poverty line, are enrolled in a qualified health plan provided by the state marketplace, and are not eligible for other minimum essential coverage. Other minimum essential coverage is defined as Medicare Part A, Medicaid, Children’s Health Insurance Program (CHIP), Tricare, or an affordable employer-sponsored minimum value plan. Pursuant to a Proposed Treasury Regulation, an employer-sponsored minimum value plan insurance must be “affordable,” which is defined as costing in excess of 9.5% of total household income, and meet the minimum standard of covering 60% of eligible expenses.
Some additional changes that include tax rates and itemization requirements follow. Specifically, the Additional Medicare Tax, which will be assessed at a rate of 0.9% of wages that exceed a threshold income of $125,000 for individual filers or $250,000 for joint filers, and the Net Investment Income Tax, which applies an additional 3.8% tax to individuals, estates, and trusts that have investment income of threshold amounts, are now added. With regard to itemizing your deductions, you may deduct medical expenses in excess of 10% of your adjusted gross income if you are under age 65 and deduct medical expenses in excess of 7.5% if you are age 65 and older.