Obamacare penalties a cash cow for feds?

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The Internal Revenue Service has released preliminary data revealing that approximately 6.5 million taxpayers paid $3 billion in Obamacare penalties for not having health insurance in 2016.

Beginning in 2014, the individual mandate established in the Affordable Care Act required Americans to purchase health care coverage or pay a penalty to the Internal Revenue Service (IRS).

Although the number of taxpayers paying the penalty has declined since the implementation of the mandate in 2014, the total dollar amount of penalty payments to the IRS has increased.

In 2014, individuals without insurance were required to pay the greater penalty of either a $95 flat fee or 1 percent of the household’s adjusted gross income in excess of the threshold for mandatory tax filing. In 2016, penalties increased to a $695 flat fee or 2.5 percent of the adjusted gross income.

In 2014, preliminary data from the IRS revealed that 7.5 million taxpayers paid $1.5 billion in Affordable Care Act penalties. The numbers increased in the final data report which showed that 8.1 million taxpayers paid $1.7 billion in penalties.

The numbers reported in the IRS’s preliminary data from 2016 are nearly double what was collected in 2014. Therefore, an increase in the final 2016 totals is anticipated.

According to IRS reports, the average penalty paid in 2016 was approximately $470, about 70 percent of payments were $500 or less, and only 7 percent of payments were $100 or less. While 117 million tax returns of individuals had qualifying health care coverage all year, 12.7 million taxpayers claimed an exemption and did not pay the penalty. The most common exemption arises from a household’s income being less than the tax-filing threshold.

The IRS has eased 2017 requirements for the Affordable Care Act’s individual mandate following President Trump’s executive order that obligates federal agencies to reduce the burden of Obamacare. The IRS will no longer require taxpayers to indicate whether or not they have health insurance.

H/T: The Washington Free Beacon

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