Although the Affordable Care Act resulted in healthcare coverage for the vast majority of Californians, a small percentage still are not enrolled in an insurance plan. Now, with the federal income tax penalty for coverage failure set at 0 dollars, some policymakers expressed concern that the number of uninsured California residents could grow.
With that fear in mind, the state has now instituted its own mandate. Those who remain uncovered by a health insurance policy in 2020 will be subject to a penalty, this time on their state tax return rather than federal.
The penalty will amount to $695 per uncovered adult in the household, and half of that amount for each uncovered child. The penalty goes into effect with regard to the 2020 tax year, with penalties charged in Spring of 2021 when California residents file their state income tax returns. Some exemptions to the law do apply.
In order to avoid the potential penalty, health insurance coverage must be maintained throughout 2020. That makes the current Open Enrollment season vitally important for all Californians.
If you are not currently enrolled in a health insurance plan, you must choose one by December 15 in order for coverage to begin on January 1, 2020. Get started today, so that you have time to adequately compare plans and select one that best suits your needs. Give us a call and we’ll be happy to help you protect your family, while avoiding any unnecessary tax penalties in 2021.