The requirement to buy health insurance is a signature element of the Affordable Care Act aka Obamacare. But the Affordable Care Act includes plenty of other tax provisions affecting individuals. Here's a look at some of the key ones:
Individual mandate: Starting in 2014, most Americans will be required to buy minimum essential health insurance coverage. If they don't, they must pay an annual penalty to the IRS, known as a "shared responsibility payment." The penalty will be equal to a specified dollar amount or a percentage of one's household income, whichever is greater. It starts at $95 per person or 1% of income in 2014; rises to $325 or 2% of income in 2015; then increases to $695 per adult or 2.5% of income in 2016. Thereafter, the penalty will be adjusted for inflation. Someone who lacks coverage for only part of the year would only pay part of the penalty. But no penalty is due if someone goes without coverage for fewer than 90 days in a year. People who earn too little to file tax returns and those for whom insurance would eat up more than 8% of their income are exempt, among others.
Premium tax credit: Starting in 2014, most low- and middle-income Americans who buy health insurance on the new state and federal exchanges will be eligible to receive a federal subsidy to defray the cost of their policy premiums. Anyone making up to 400% of the poverty line qualifies for a subsidy. That means any individual making up to $45,960 or a family of four with household income up to $94,200 is eligible. The less you make, the bigger your subsidy will be.
If you purchased your health insurance on an exchange (marketplace), you will receive a mandatory Form 1095-A from the marketplace and you must file new tax Form 8962 (Premium Tax Credit).