Californians With No Health Insurance Will Face Tax Penalties

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According to the U.S. Census Bureau, more than 2.8 million Californians don’t have health insurance.  Those who choose to go uninsured are in for a rude awakening.  A new law went into effect on January 1^st stating that all CA residents must have health insurance throughout 2020.  If you, your spouse or your dependents don’t have adequate coverage, you will be penalized when you file your state tax return in 2021.

Getting covered

The open enrollment period has ended, but you may still be able to get health coverage.  Certain life events such as moving, getting married or losing coverage can qualify you for a special enrollment period.  You’ll have 60 days to enroll in a Covered California health insurance plan or to change your existing plan.  If you cannot afford coverage on your own, you may be able to get financial assistance from the state.

What is the penalty for being uninsured?

If you go without coverage and don’t qualify for an exemption, you’ll be penalized for each month you’re uninsured.  The penalty will be 2.5% of your income or a flat rate based on your family size, whichever is higher.  The flat rate is $695 per adult and $347.50 per child. 

How can I qualify for an exemption?

Exemptions should be claimed when you file your CA state tax return. If you qualify for an exemption, you may avoid penalties. Qualifying exemptions are for income that is below the filing threshold, when health coverage is unaffordable (i.e., more than 8.24% of your income) or when your gap in coverage was 3 months or less. To view the full list of exemptions, click here.

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