|
|
Tax Penalties
The IRS previously imposed a share responsibility payment (tax penalty) beginning with tax year 2014 and through 2016 for adults and children who did not meet MEC during the tax year.
Effective January 1, 2020, the State of California has reinstated this individual mandate with penalties being enforced by the state’s Franchise Tax Board (FTB).
The penalty will either be a flat amount based on the number of people in the tax household, or a percentage of the household income - whichever is higher.
- Flat amount: $750 per adult (age 18 or older) and $375 per child (under 18).
- Percentage of household income: 2.5% of the amount of gross income that exceeds the filing threshold requirements based on the tax filing status and number of dependents.
For more information, clients can visit the state’s FTB website which includes a Penalty Estimator tool.
Related Topics