Updated: 2020-10-02 by
In California, you may be required to pay a state tax penalty if you don't have health insurance.
California imposes a tax penalty on residents who don't have health insurance unless they qualify for an exemption. The penalty essentially replaces the federal Affordable Care Act penalty that ended in 2019. If you owe a penalty, it will be due when you file your tax return.
What Is the Penalty for Not Having Health Insurance in California?
The formula for determining the precise penalty is complicated, but it closely tracks the former ACA penalty. In California, if you are uninsured for a full calendar year and you don't qualify for an exemption, you will owe the lesser of the following amounts:
- $695 for each adult ($347.50 for each child) up to a maximum of $2085 or 2.5% of your household income above California's income tax filing threshold, whichever amount is greater.
- The average annual premium cost for bronze-level coverage for the uninsured family members. This amount is calculated using the bronze plans sold at Covered California, the state's health insurance exchange.
Rebecca is a single woman without health insurance who earns $50,000 in 2021. When she files her taxes in April 2022, her tax penalty will be based on $38,000 of her income, because $50,000 minus her $12,000 filing threshold equals $38,000. (This is assuming a $12,000 filing threshold; the threshold will probably be slightly higher by then.) Two-and-one-half percent of $38,000 is $950. Because that amount is greater than $695, and because an average-priced bronze plan would have cost much more than that, Rebecca's penalty will be $950.
If you are uninsured for fewer than 12 months of the year, you can calculate the penalty by determining 1/12 of the full penalty amount and then multiplying that by the number of months you were uninsured. (But if you are uninsured for no more than three consecutive months, you are exempt from the penalty altogether. See below for more information about exemptions.)
Returning to Rebecca's situation above, let's say she is uninsured for just seven months in 2021. She divides her full penalty amount of $950 by 12, which equals $79. Then she multiplies $79 by seven to get her total penalty amount of $553.
The California Franchise Tax Board offers a penalty calculator you can use to estimate what you might owe if you are uninsured and don't qualify for an exemption.
To learn about what qualifies as health coverage under Obamacare and whether you are exempt, see Do I Have to Get Obamacare in California?
You may also be interested in:
Essential facts about the Affordable Care Act (ACA or Obamacare) in California, including whether you must get health insurance, how much it will cost, and how you can save money.
Where to go in California to get health plans under the Affordable Care Act (Obamacare) and how to get help with the application process.
Learn the five factors that determine what residents of California will pay for health insurance under the Affordable Care Act