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IRS warns Americans without insurance must make 'shared responsibility payment'

IRS warns of "shared reponsibility payment" in 2015
IRS warns of "shared reponsibility payment" in 2015
Bill O'Leary/The Washington Post/Getty Images

On Tuesday, the IRS warned Americans must have a government-approved health care plan or pay what it called a "shared responsibility payment" in 2015, Americans for Tax Reform reported.

"The term 'shared responsibility payment' refers to the Obamacare individual mandate tax, one of at least seven tax hikes in the healthcare law that directly hit families making less than $250,000 per year," ATR said, calling the term "Orwellian."

On a website titled "Four Tax Facts about the Health Care Law for Individuals," the IRS says the 2014 tax forms will ask taxpayers if they had insurance coverage or qualified for an exemption during the year.

The IRS also says the "individual shared responsibility provision" applies to everyone, including children and seniors, and goes into effect on Jan. 1, 2014.

"Each child must have minimum essential coverage or qualify for an exemption for each month in the calendar year," the IRS says. "Otherwise, the adult or married couple who can claim the child as a dependent for federal income tax purposes will generally owe a shared responsibility payment for the child."

The agency also warns that taxpayers will have to make the shared responsibility payment for any month in 2014 they were either not covered or qualified for an exemption.

"In general, the payment amount is either a percentage of your household income or a flat dollar amount, whichever is greater," the IRS explained. "You will owe 1/12th of the annual payment for each month you (or your dependents) do not have coverage and are not exempt."

That amount is either one percent of a taxpayer's household income that is above the tax return filing threshold for his or her filing status or a flat amount of $95 per adult and $47.50 per child to a maximum of $285.

"Once fully phased in," ATR said, "the Obamacare individual mandate tax will rise steeply, to a maximum of 2.5 percent of Adjusted Gross Income or $2,085 – whichever is higher."

The IRS says it will work with taxpayers who cannot afford to make the shared responsibility payment.

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