Non qualified health plan penalty

[Mick999]

Farm Bureau said they have a qualified plan and a non qualified health care plan.  If I choose the less expensive non qualified plan, they said I would have to pay a penalty of 2% of my income. I do not remember TT having that option on last years return. Will you this year?

[rjs · Accepted solution]

TurboTax does calculate the health insurance penalty, and has done so since it went into effect. It's built into the health insurance section of the interview. It doesn't specifically ask you about paying a penalty. It asks you if you had qualified health insurance coverage. If you didn't, and if you don't qualify for an exemption, it automatically calculates the penalty. The line where the penalty appears on the actual tax return form says "Health care: individual responsibility." You might not have recognized that as meaning a penalty for not having insurance. It's on Form 1040 line 61, Form 1040A line 38, or Form 1040EZ line 11.

For 2016 the penalty is $695 or 2.5% (not 2%) of your household income above the filing threshold, whichever is greater. It will be the same for 2017, but the $695 minimum penalty may be adjusted for inflation.

[TaxGuyBill]

Just to clarify:  The minimum penalty of $695 is per person.  Well, it's actually $695 per adult, plus $347.50 per child.