Congress eliminated the federal tax penalty for not having health insurance, effective January 1, 2019.
For 2018, most people are required to have health insurance or else pay a tax penalty, unless they qualify for an exemption. This is called the individual responsibility requirement, or the individual mandate.
While the federal tax penalty continues to apply for 2018, recent changes will make it easier for people to claim a hardship exemption, and so owe no penalty, when they file their 2018 federal income tax return. If you experienced a hardship that prevented you from getting coverage in 2018, just check the box on the front of Form 1040, indicating that you qualify for a hardship exemption. You will not be required to submit proof of the hardship with your tax return, though you should retain any documentation for your own records.
Several states have adopted individual mandates with state tax penalties for not having health insurance. These include Massachusetts, New Jersey, and the District of Columbia, effective for the 2019 calendar year. Vermont will impose a tax penalty for not having health insurance starting in 2020. Other states are considering state individual mandates. Check with your tax adviser for more information.
Regardless of the penalty, it is important to have health coverage if you can. Health insurance continues to be offered during annual Open Enrollment periods. If you don’t sign up during Open Enrollment you might have to wait up to one year until your next opportunity to enroll.