guest commentary by David Potts
David Potts is a certified public accountant with more than 25 years experience (Although every effort is made to provide you accurate and timely tax information, it is general in nature and not specific to your facts and circumstances. Consult a qualified tax professional to discuss your particular case.)
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A couple of major events happened last week. The one event everybody knows about is that President Obama was re-elected. The other event that nobody cares about but me is that I turned 55.
With the re-election of President Obama comes the certainty that Obama Care will not be repealed and the certainty that I now need to commit many hours, actually days, of reading the Affordable Care Act (think ObamaCare) to educate myself so that I can advise my clients on how to comply with its provisions.
The day after the election I participated in a two hour webinar on the upcoming requirements of the Affordable Care Act. Of course the most notorious provision of the Affordable Care Act is the mandate that all individuals must be covered by a minimum level of health insurance or they will pay a penalty.
As a review, here is the executive summary of the individual mandate. Well, just a minute. I’m sorry. I’m using the wrong terminology. The Affordable Care Act does not refer to this provision as a mandate. I should correctly refer to this provision of the law as a “shared responsibility payment.”
Back to my executive summary of the shared responsibility payment (or mandate): For anybody without a minimum level of health insurance, beginning in 2014, you will make a shared responsibility payment when you file your income tax return. In 2014 the penalty amount is $95 per individual increasing to $695 per individual in 2016, then $695 indexed for inflation for 2017 and thereafter.
There are limits to this mandate that I won’t go into now, but one of the curious things about this mandate is that the IRS is prohibited from collecting this penalty with liens and levies. Liens and levies are a collection officer’s baseball bat. I guess, if you refuse to pay the penalty, the IRS will come to your door and shout, “Boo!” to get your money.
The other significant event last week was that I turned 55. As I age I tend to get a bit more mortal and sentimental. Close family members start dying with more frequency. It’s a function of age.
A favorite aunt died a couple of months ago and I am the executor of her estate. I was going through her papers when I came across a folder labeled “Indian Documents – Cherokee.” I have always known about my Cherokee heritage because my Mom is a citizen of the Cherokee Nation, too. However, I had never taken the time to apply for my own citizenship. When I came across this folder it inspired me to begin the application process. It’s just a bit of my heritage that I want to claim.
The Affordable Care Act has several exceptions allowing certain people to avoid the shared responsibility payment:
• Undocumented aliens (non-citizens)
• Health care sharing ministry members
• Religious conscience
• Native Americans
I am fortunate to have great health insurance and my applying for citizenship in the Cherokee Nation is, for me, a sentimental endeavor. But the collision of the certainty of ObamaCare being realized, my interest in claiming my place as part of the Cherokee Nation, and learning that Native Americans are exempt from the Obama Care mandate penalty made me wonder how many people with Native American blood are aware they are exempt from the mandate, or they may be like me and just have been too lazy to apply for citizenship with their appropriate tribe.
If your family has lived in this part of the country for decades, there is a good chance you have Native American heritage. If you find yourself in future circumstances where the mandate penalty might apply to you, this exemption for being a Native American may be a way to avoid the penalty. It’s a better solution than incarceration.
Do a bit of genealogy and see if you can prove your Native American ancestry and claim your heritage.
It’s good to know from where you come.