Internet master Matt Drudge of the Drudge Report announced to the internet on Friday that he had paid the Obamacare individual mandate penalty, which he called a "liberty tax." That's unlikely.
Just paid the Obamacare penalty for not 'getting covered'... I'M CALLING IT A LIBERTY TAX!— MATT DRUDGE (@DRUDGE) March 21, 2014
Actually, it's not clear what Drudge is saying he actually paid. There are a few options, none of which really fit.
Update, Saturday: Matt Drudge responded to criticisms over his tweet late Friday by clarifying that he'd "paid '14 1st QTR tax estimates." Originally Drudge tweeted that "small businesses" are now paying their quarterly taxes, though his business is likely too small to be affected by the employer mandate. Self-employed individuals file taxes early as well.
Update, Saturday: The Wire reached out to the H&R Block Tax Institute, which said you’re free to over pay your tax obligation on your quarterly estimated tax form, but the IRS has “no way to designate it as penalty prepayment.” The line item for “other taxes owed” doesn’t mention the health law penalty, and the IRS still needs to offer guidance over several aspects of the penalty, the company said in an email.
“When the return is filed (in 2015) the overpayment of the estimated taxes likely would get netted against all taxes due and cover the penalty,” according to H&R Block. The actual estimated tax form states the mandate should be paid with the 2014 return next year, though “you may want to consider this when figuring your ‘Other taxes’” owed.
It's not the individual mandate penalty.
The individual mandate penalty is a fee assessed if you haven't spent at least nine months of the year covered by health insurance. Since that started in 2014, the first time that fee will be assessed is in 2015, when you do your 2014 taxes. So he'll need to wait until around January 31, 2015, the first day he can file his 2014 taxes. That's 316 days from now, not today.
If you're curious, here is a brief guide to paying the individual mandate:
- Don't buy insurance through the Obamacare exchanges, and also don't buy an ACA-compliant plan through an insurance company.
- Wait until January 2015.
- File your taxes.
It's not the employer mandate penalty.
After a series of responses to his first tweet pointing out the timeline above, Drudge pointed out that there are Obamacare taxes being enforced this year.
Obama team players trying to convince themselves NO Obamacare taxes due this year. Adjust your doses, face reality. http://t.co/b6ZKCQznod— MATT DRUDGE (@DRUDGE) March 21, 2014
Small businesses with under 50 employees don't have to worry about the employer mandate at all. By most accounts the Drudge Report has maybe three employees. (Business Insider estimated three including Drudge in 2012.) Businesses with 50 to 99 employees (and it's a stretch to imagine that many people work at the Drudge Report) won't be subject to fines until 2016. Even if Drudge staffs up rapidly, he has some time before the "liberty tax" kicks in.
If he's paying higher taxes because of Obamacare, it's nothing he can opt-out of.
Even though Drudge was referring specifically to the penalty for "not 'getting covered'," there are a few other taxes being enforced this year. Drudge linked to South Carolina Rep. Jeff Duncan's explanation of tax increases linked to the Affordable Care Act that apply now, including the Medicare Payroll Tax — which would apply to employers now. There is also a "3.8 percent surtax on investment income" that might apply, but that is not the same thing as paying a fine for not "getting covered." But neither of those is opt-out, which Drudge said is what he was referring to.
Of the things on Duncan's page that are, it seems unlikely that Drudge decided to pay the 10 percent tanning salon tax or the increased penalty for withdrawing money from a health savings account. Of course, that page also says the employer mandate is currently in effect, which it isn't.
Drudge, who is feeling "mocked," clearly referred to the individual mandate in his first tweet and other unidentifiable taxes in the tweets that followed. The problem here isn't that Drudge is paying the mandate and opting out of Obamacare. He announced that was his plan in January, and he's free to do that. The problem is that he's either misleading his followers or himself. No wonder everyone is confused.