No, the IRS does not currently fine you for not having health insurance at the federal level. The federal "individual mandate" penalty was reduced to $0 for tax years 2019 and later, meaning there is no federal tax penalty for being uninsured. However, some states (CA, MA, NJ, RI, and DC) have their own mandates and may impose state-level penalties.
If you don't have health insurance, there's no federal penalty anymore (since 2019), but some states (like CA, MA, NJ, RI) charge their own tax penalty on your state return, so you might owe money if you live in one of those states and don't have coverage or an exemption, requiring you to file forms like IRS Form 8965 if you qualify for an exemption. You still need to report your coverage status on your federal return, even if just by checking a box or noting you had no penalty, otherwise, the IRS might delay your refund or send a notice.
How does the IRS know if you have health insurance? The IRS will know you have health insurance if you use a 1095 to file your taxes. If you don't have health insurance, you will not be penalized by the IRS.
There is no longer a FEDERAL penalty for not having healthcare insurance. Only four states and the District of Columbia still have penalties for not having health insurance with some caveats (e.g., some gap in coverage allowed, etc.): California.
The maximum fine for driving without insurance varies significantly by state, but can range from a few hundred dollars (like $300 in Tennessee) to thousands, with repeat offenses often increasing penalties to $2,000 - $5,000 or more, plus license suspension, registration revocation, vehicle impoundment, and even jail time in some areas like Kentucky or Illinois for severe cases. First offenses typically see fines between $100 and $1,000, but additional fees and penalties add substantially to the cost.
MEC refers to a level of health benefits that the IRS requires all individuals to have. The person or their tax preparer will use the information from Form 1095-B as proof of health coverage for that tax year.
On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act of 2017, which eliminated the federal tax penalty for violating the individual mandate, starting in 2019.
Health coverage providers are required to file information returns with the IRS and furnish statements to individuals each year to report coverage information for the previous calendar year.
If you didn't have coverage during 2025, the fee no longer applies. This means you don't need an exemption in order to avoid the penalty. If you live in a state that requires you to have health coverage and you don't have coverage (or an exemption), you'll be charged a fee when you file your 2025 state taxes.
Owe taxes if you used more of the premium tax credit than you qualified for in 2025. You'll have to report the excess amount on your 2025 tax return by filing Form 8962, Premium Tax Credit (PDF, 115 KB). Find instructions for Form 8962 (PDF, 348 KB).
You will need Form 1095-A before you file your taxes. You can use Form 1095-A to reconcile the advance premium tax credits you received with the amount you were eligible to receive. If you fail to file a tax return reconciling those payments, you will not be eligible for premium tax subsidies in the next year.
There's no federal penalty for cancelling health insurance, but some states (CA, MA, NJ, RI, DC) have their own mandates and will charge a state tax penalty if you're uninsured. The main risks of cancelling are losing coverage (and facing high medical costs), being unable to get new insurance until the next Open Enrollment unless you have a Qualifying Life Event, and potentially having to repay premium tax credits if you received them.
If you don't pay all owed premiums, you may lose your coverage dating back to the first month you missed the premium payment. You may also have to wait to get health coverage. The 3-month premium payment grace period starts the first month you didn't pay, even if you make payments for the following months.
Can I go to jail if I don't have health insurance? No, you can't go to jail for not paying the penalty; the government can't even garnish your wages. The most the IRS can do is withhold your tax refund.
You can claim exempt status on your IRS Form W-4 for one year at a time, provided you qualify (owed $0 tax last year and expect to owe $0 this year), and must submit a new W-4 by February 15th annually to remain exempt; otherwise, you'll face penalties and interest for under-withholding if you didn't actually qualify.
The IRS $600 rule refers to a change in reporting requirements for third-party payment apps (like Venmo, PayPal) for taxable income from goods and services, where platforms must send a Form 1099-K if you receive over $600 in a year, intended to capture gig economy/side hustle income, though delays and phased implementation have adjusted the timeline, with current rules for 2024 using a higher threshold ($5,000) before fully phasing to $600 for future years, but remember all taxable income, regardless of form, must always be reported.
The IRS 7-year rule primarily applies to keeping records for claiming a deduction for bad debts or losses from worthless securities, allowing a longer period to file for a credit or refund, but it's not a universal audit limit; it's often a recommended safe buffer for general record-keeping, with the standard IRS audit period usually being 3 years, extending to 6 years for substantial income omission (over 25%) or foreign income issues, and indefinitely for fraud.
No, the IRS will not penalize you at the federal level for not having health insurance for tax years 2019 and beyond, as the federal penalty was eliminated by the 2017 Tax Cuts and Jobs Act. However, several states (like CA, MA, NJ, RI, and DC) have their own individual mandates and may impose a state-level penalty, so it depends on where you live.