Last year, the President signed legislation that repealed the “penalty tax” for not having health insurance for tax years beginning on or after Jan. 1, 2019.
On May 31, Governor Murphy signed into law the “New Jersey Health Insurance Market Preservation Act,” which establishes a “shared responsibility tax” for state residents without health insurance, effective January 1, 2019.
Here's what you need to know:
  • It requires NJ residents to have health insurance with minimum essential coverage. There are exceptions for religious objection, income under $10,000 for single filers and $20,000 for married filing jointly, or hardships.
  • The state penalty tax is generally equal to the penalty tax that was repealed by the President for federal tax purposes.
  • The amount of the tax penalty, is typically equal to the greater of $695 per family member ($347.50 for persons under the age of 18), up to a maximum of $2,085 or 2.5 percent of household income, whichever is greater.
  • Businesses and insurance companies will be required to file reports with the New Jersey Division of Taxation.
  • The New Jersey Treasurer will be defining the requirements and procedures for reporting and paying the penalty tax.