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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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Concerning the shared responsibility payment having health

Customer Question

Concerning the shared responsibility payment for not having health insurance. If my wife is enrolled in the lowest cost bronze plan for $500 per month and I go without insurance but the lowest cost bronze plan would be $686 for myself. When calculating the exemption can I still add both premiums together and multiply our combined income by .0805 to see if I’m exempt from paying the penalty?
Submitted: 10 months ago.
Category: Tax
Expert:  Lev replied 10 months ago.

When you calculate possible exemption - it is calculated separately for each person - but you will need to use household income and number of persons in your household.

Thus if you want to verify if YOU are eligible foe the exemption - you may not use health insurance premiums paid for your spouse.

Sorry if you expected differently.

Customer: replied 10 months ago.
If we were both on the same policy then we could use the combined premium, correct?
Expert:  Lev replied 10 months ago.

In this case - the premium would be apportioned to each of you.
However "use the combined premium" would depends on the purpose...

If you meant to calculate possible exemption - as I mentioned - - it is calculated separately for each person - and the premium paid for YOUR policy would be used to determine your exemption.

Customer: replied 10 months ago.
the penalty is based on MAGI or Taxable Income
Expert:  Lev replied 10 months ago.

The penalty is calculated based on MAGI,

but that is based on your income in each month - so if your income is not evenly distributed over teh year - you might be exempted for some months.

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.

Expert:  Lev replied 10 months ago.

In general, the annual payment amount is the greater of a percentage of your household income or a flat dollar amount, but is capped at the national average premium for a bronze level health plan available through the Marketplace.

See here

https://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/ACA-Individual-Shared-Responsibility-Provision-Calculating-the-Payment

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