The Affordable Care Act
This month, as 2014 comes to a close, we are taking a look back at some of the most important blog topics we have covered both in case you missed them, and to help you prepare for 2015!
Individuals earning below the tax filing threshold of $10,150 will not pay a penalty. Others earning above $10,150 will pay based on earnings over the tax threshold of $10,150.
For taxes filed for the year 2014:
- Individuals earning between $10,150 and $19650, there is a flat penalty fee of $95 per adult (47.50 per child under 18). Thus, a single adult making $19,000 would pay $95 (1×95); a family of two adults at $19,000 would pay $190 (2×95); and a family of one adult and one child at $19,000 would pay $142.50 (95+47.50). The maximum penalty per family with a household income below $19,650 is $285.
- Individuals earning above $19,650, will be required to pay a penalty equal to 1% of their annual income. For example, a single adult employee earning $40,000 per year would be required to pay $400 (40,000×1%). Whereas, a family of six with two adults each making $50,000, the total income would be $100,000. Therefore the family would pay $1,000 (100,000×1%).
The maximum penalty for 2014 is $2,448 per individual annually, which is 1% of a yearly income of $244.800. Earnings above that for individuals are capped at the individual maximum penalty.
The maximum family penalty issued by the IRS was $12,240 for a five-member family, and will only impact households with a combined yearly income of $1.2 million or more.
*Remember these penalty rates are only for the year 2014, and will increase in 2015 and beyond. The 2015 penalties will be the greater of $325 per person or 2% of total income. 2016 Rates will rise further to the greater of $695 per person or 2.5% of total income. The years following 2016, the penalty rates will be adjusted according to inflation.
Call HR Strategies today for assistance! 770-339-0000 or visit our website at www.hr-strategies.com.