Gradual release

[kdonnel]

Right, the only tax implication is whether or not you have insurance. You can be penalized if you don’t carry any unless you are low income.

I believe that penalty no longer exists.

 

[kymom99]

I believe that penalty no longer exists.

You’re probably right. A friend’s daughter got hit with it about 5 years ago.

I pay $300 a year to my husbands insurance because I can get coverage through my retirement. But I still save money using his coverage. That doesn’t get reported to the IRS though.

 

[barkley]

I believe that penalty no longer exists.

quick google search shows the irs did away with it for federal taxes but massachusetts, new jersey, california, rhode island and the district of columbia have individual state mandates/penalties. funny thing is it shows my home state is considering a mandate but since we don't have state income taxes i'm not sure how they would enforce it with any kind of a penalty.

 

[disneychrista]

Why would there be a tax penalty for being covered on a parents insurance vs you own?

 

[goofytinkerbell]

1

 

[Pea-n-Me]

Why would there be a tax penalty for being covered on a parents insurance vs you own?

Because it costs the company money. I have seen it done for spouses, too.

 

[kdonnel]

Because it costs the company money. I have seen it done for spouses, too.

I understand a spousal surcharge from a company perspective, I don't agree with it, but I understand the reasoning.

But that is not a tax penalty. It is charged and collected by the company.

Others and myself are wondering what sort of tax penalty might possible be assessed by the government. I think the possible extra tax mentioned below might be a misremembering. I don't believe there has ever been any sort of federal penalty/tax that would apply if an adult child is on their parents policy with the option of being covered on their own policy. Perhaps Scott is thinking about the federal penalty if you did not have coverage that existed for a short period of time.

You may want to verify this. My daughter was on my insurance till she turned 26 and I do remember when filing taxes that there would have been an additional cost ( or a penalty, I don't remember which ) if you were covering an adult child's health coverage if their job also provided coverage and they declined to take it. I'm sure there are others on the board that would know more details than I.

 

[luvmyfam444]

Never even occurred to us to offer financial help. We just always told our kids their bedroom was waiting for them if the need came up. Neither kid moved back in and both paid all their own bills. Well, my wife and I did give our daughter a burglar alarm system with cameras when she bought her house, that only cost $150 for the installation and $30 a month for the monitoring.

Always makes me sad when I see how low teacher salaries are in some parts of the U.S. Fortunately that isn't the case in the district we live in IMHO. They start teachers at $47,000 a year here.

you do know $47k is extremely low for a professional to get paid?

 

[Mackenzie Click-Mickelson]

you do know $47k is extremely low for a professional to get paid?

Yup. According to annual reports the average (ETA: teacher) salary for CA as a state is $85,856 for the year 2020-2021. My state is $53,619 average. If the PP is saying they feel fortunate their district pays well...well according to the data it pays just about 55% the average rate for the state. Not exactly all that great.

 

[CdnCarrie]

you do know $47k is extremely low for a professional to get paid?

Very average starting salary here.

 

[disneychrista]

Because it costs the company money. I have seen it done for spouses, too.

But why would the federal or state government care about that?

 

[cvjw]

you do know $47k is extremely low for a professional to get paid?

My kid started out at $51,000 with a big 4 accounting firm. With a bachelors degree, a masters degree and having already passed the CPA exam.

 

[tvguy]

you do know $47k is extremely low for a professional to get paid?

I was a professional and never made more than $52,000.

 

[amylevan]

you do know $47k is extremely low for a professional to get paid?

For an entry level professional? Entry level civil engineers are getting $50-60k here.