Do I still have to pay the Obamacare fine?
El Paso, Texas —
Jess, a KFOX14 viewer, sent me this question: "Hey John, can you tell me if the clause in Obamacare, 'Sign up or get fined,' is still in effect?"
The short answer to Jess's question is no. Under the tax cut law President Donald Trump signed in December 2017, the tax penalty for not signing up for health insurance under the Affordable Care Act, commonly called Obamacare, will disappear when you file your federal income tax forms next year.
Many people were under the mistaken impression that they didn't have to pay the penalty when they filed their taxes this year. But remember, you file your taxes retroactively for the previous year, so while the penalty did technically disappear under the new federal tax law this year, it really impacts the tax forms you'll fill out in 2019 for this tax year.
For example, an individual taxpayer who didn't have health insurance in 2017 and didn't sign up for coverage through Obamacare, owed a penalty when they filed their taxes this year of $695, or 2.5 percent of their taxable income, whichever is greater.
That all disappeared this tax year, so when you file your tax return for 2018 next year, you'll owe no penalty for not signing up for health coverage. Taxpayers no longer have to worry about paying the fine.