Health Care and Income Security for War Tax Resisters
This publication is one of a series of “practicals” that offer ideas, tips, and information for individuals who want to cut off their financial support for the U.S. war machine or are currently practicing war tax resistance. Other pamphlets in this series discuss how to control income tax withholding, choosing low income/simple living, self employment, and whether or not to file an income tax return. The full list of the “Practical Series” appears at the end of this text or under the Resources tab.
On the one hand this booklet deals with a lot of issues for war tax resisters who are getting on to retirement age, whatever that means for each individual. On the other hand, younger readers should find useful information here on that topic and also some hints toward planning for the future.
In 2018, we are watching news regarding the Affordable Care Act (ACA), which at this writing is being maintained amidst contradictory messages coming out of the Trump administration and Congress. Efforts to change or undermine the ACA may mean that some information in this booklet will need changing before long, but for 2018 the requirement to have health coverage and show it on your tax form (the mandate) is still in effect. The mandate is set to end in 2019.
The topics covered in this booklet include:
Health Care: Affordable Care Act, Medicare, Medicaid, living without insurance
Income Security and Social Security
Planning Ahead — Inheritance, Trusts, Wills
Community Living and Other Alternatives
You may not find an answer here that responds to your exact situation, but you will find ideas to help you plan, as well as a resource list at the back for more research. In addition, you might want to give this booklet to family members who are concerned about your welfare and about subjects like the question of inheritance.
The Affordable Care Act (ACA)
The first edition (2006) of this booklet gave readers ideas to meet the challenge of health coverage on a low budget, and we’ve kept some of the stories here that may still be useful in certain circumstances. But since 2014, we are grappling with the Affordable Care Act (ACA) or “Obamacare,” which is inextricably linked to the IRS and the income tax system. The ACA requires everyone to have health insurance, but some readers will get it through their employer or buy it privately; some are 65+ and will be on Medicare; very low income readers might skip to the Medicaid section. But many of you will need to sign up through a Marketplace or exchange, and then you will find out if you qualify for a subsidy, paid in the form of a “premium tax credit.” The credit is based on income reported to the IRS. Adjustments (payments or refunds) are made when you file with the IRS at the end of the year.
The Affordable Care Act pushes more people into the tax system, undoubtedly a calculated move on the part of the federal government and a problem for many war tax resisters. Some resisters who file and receive the credit have benefited because the credit lowered or wiped out any taxes owed. Stories from resisters inform our work, but the variations state-to-state and the Trump administration’s threats to kill or undermine the ACA add to the confusion as to availability of insurance and enforcement of the law.
A good reference for the tax implications of the ACA is IRS Publication 5187, Health Care Law: What’s New for Individuals & Families, http://www.irs.gov/pub/irs-pdf/p5187.pdf. Before you file your income taxes, you will receive a statement, Form 1095-A, from your health insurance provider. You fill out IRS Form 8962 with the information on the insurer’s statement plus your final adjusted gross income from your 1040 to reconcile over- or under-payments for subsidized healthcare. Form 8962 is on the IRS website, and you can use that form to estimate what you should pay for health care during the year if you qualify for the premium tax credit.
While there are many complications and controversies about the ACA, for war tax resisters a few problems and benefits are notable:
Nonfilers who want to stay out of the tax system are in a quandary. You cannot get subsidized insurance coverage unless you file, because the IRS manages that aspect of the ACA. The exception is for nonfilers who live below the taxable level and are not required to file; they can be covered through Medicaid or a state plan for low income residents or they can remain exempt from ACA requirements.
Married couples with a modest income can only qualify for the subsidy if they file jointly. This is a problem for many couples who maintain separate finances in order to protect one spouse’s assets from collection attempts against the other spouse’s refused war taxes.
Filing and staying below taxable income takes attention to detail, calculations and adjustments. Some are finding that they can make a decent income (livable on modest standards), qualify for subsidized insurance, and end the year with no income taxes owed to the federal government. Be creative: consider an option like combining a low-cost, high deductible health plan with a Health Savings Account (HSA). This covers catastrophic health coverage while you pay for other medical expenses with non-taxed income. Having any insurance at all reduces the amount you’ll have to pay to providers because of agreements between insurance companies and health care providers as to the maximum they can charge. These two stories offer real-life examples of benefits from the ACA for certain war tax resisters.
W-4 Resistance and the ACA
Salaried WTRs getting their own insurance may want to include the premium tax credit (if any) into the calculations and adjustments when declaring allowances on the W-4 form, which the payroll office uses to calculate how much tax is withheld from your paycheck. Similar adjustments can be made by self-employed WTRs if they pay some estimated taxes.
As Robert suggests above, pay your insurance premium with your own money (money which you have because it’s not being withheld from your paycheck) and then get an equivalent net premium tax credit on your Form 1040. In this way, you are sending your money directly to an insurer and not owing it as federal income tax. Depending on your form of war tax resistance and any fluctuation in your income, this may require annual adjustments. You can submit a new W-4 form anytime. See Practical #1 for more information on W-4 Resistance.
Exemptions and Opting Out
The ACA requires minimum essential coverage for every taxpayer in the U.S. unless they are exempt or pay a penalty, called an “individual shared responsibility payment.” IRS Publication 5187 includes a list of exemptions, including having household income below the return filing threshold, if the lowest cost Marketplace plan is more than 8% of annual household income, being a member of an Indian tribe, incarceration, etc.
If you file and did not have the minimum essential coverage, then you are supposed to pay the shared responsibility penalty, which is also outlined in Publication 5187. The penalty amount will increase every year, and starting in 2016 it will be 2.5 percent of household income and $695 per adult ($347.50 per child under 18).
Health coverage providers are required to file information returns with the IRS and with covered individuals for coverage in calendar year 2015. This report will include the Social Security number for all covered individuals as necessary “for the IRS to verify an individual’s coverage without the need to contact the individual.” Employers will also be required to report those covered under their plans. Whether the IRS computer systems will be able to handle all this data and use it for matching against missing returns — or for other less predictable uses — it is too early to tell.
At least for now, the IRS is not allowed to place a lien on your property or levy (garnish) your wages in order to collect money owed for the “individual shared responsibility payment” or underpayment of premiums under the ACA. Unless a person voluntarily pays what is owed, the IRS can only collect by deducting the amount due from a tax refund. If the person is not owed a refund large enough to collect the entire amount, the IRS can hold on to the debt and collect from refunds in following years.
Medicaid is a health insurance program funded by states and the federal government to provide coverage for low income people, including families, children, elderly and the disabled. It is generally administered by states. Medicaid will pay for most doctor visits, some dental needs, some vision services, and most prescriptions. Medicaid can also pay for the Medicare Part B premiums.
While the federal government helps pay for Medicaid, each state has its own rules about who is eligible and what is covered. Your eligibility for Medicaid benefits usually is determined at the local level through an interview with a city, county, or state Department of Human Services case worker. In most states, anyone who qualifies for SSI assistance is also eligible to receive Medicaid benefits.
The Affordable Care Act offers states the option to expand Medicaid to all U.S. citizens and legal residents, including adults without dependent children, with income up to 133% of the poverty line (in 2015, $11,770 for a single person, and $22,250 for a family of four; slightly higher for Alaska and Hawaii). As of January 2015, 28 states and DC are participating in the ACA expanded Medicaid program.
Issues for the Uninsured
For a variety of reasons an individual or family may still find themselves falling between the cracks or unwilling to participate in the current health insurance options.
Arranging health care without insurance can be challenging, but with ingenuity and assertiveness you may find that doors open that you had not expected. Some of the stories in this booklet offer examples. Some options include: creating your own health care fund by regularly setting aside some part of your income; bartering with health care providers; arranging personal payment plans with health care providers; investing in wellness and preventative health care; taking advantage of clinics, such as those attached to medical and dental schools; or considering dentistry or surgery outside the U.S.
If you leave a salaried job with health insurance, be sure to ask your employer about COBRA, which gives workers and their families the right to privately pay for continued benefits under the employer’s plan for limited periods of time.
Medicare is a health insurance program run by the federal government. Those who qualify are people who are 65 or older; certain people with disabilities who are under 65; and people of any age who have permanent kidney failure. Another way to put it is, Medicare is for people who receive (or would qualify for) some sort of Social Security benefits (see Social Security section below) including Social Security Retirement Benefits or Social Security Disability Insurance. Medicare is the primary payer for any claims, meaning your doctor will send bills to Medicare before asking anyone else to pay. The website has a very easy eligibility calculator at http://www.medicare.gov/eligibilitypremiumcalc/#eligibility.
Medicare comes in two parts:
Part A: Pays for expenses related to a hospital or nursing facility and is free to all who qualify. Part A can also be purchased for those who do not qualify; in 2015 the monthly premium is $407. Be sure to see the website or talk to a benefits counselor at a senior center or social service agency if you are uncertain about your eligibility.
Part B: Pays for doctor visits and related tests and has a monthly premium (usually deducted from your Social Security payment) for most people of $104.90 in 2015 plus $147 deductible; monthly costs rise for individual with annual incomes above $85,000.
Medicare is a national plan, but varies from place to place. Some areas require that you enter a Medicare HMO plan, which usually has better coverage but limits your ability to see certain doctors or to obtain Medicare-qualifying health care when you travel. Medicare provides basic health care, but it doesn’t cover all medical expenses or the cost of most long-term care.
Part D: Optional drug coverage. Part D requires choosing a plan from private health insurers and paying a separate premium to them. Part D may only benefit those who require a number of prescriptions or expensive drugs.
Help for Low Income Medicare Beneficiaries
The Qualified Medicare Beneficiary Program (QMB) provides financial help to pay for Medicare monthly premiums, deductibles and co-insurances. It is managed state by state with both federal and state funding. The QMB program is available to all people who are eligible for Medicare Part A and meet income and asset eligibility. For those who are eligible, the QMB program will pay the Medicare Part A and Part B monthly premiums, Part A deductibles and co-insurances, and the Part B annual deductible and 20% co-insurance amounts.
Social Security Taxes – Some Considerations
If you are a salaried worker, it is not possible to stop the withholding of Social Security and Medicare taxes. Under the Federal Insurance Contributions Act (FICA) these taxes are a set percentage deducted from each paycheck (up to a set annual maximum; $7,347 in 2016).
Among self-employed and low income resisters, opinions vary regarding payment of Social Security and Medicare taxes. Most who refuse payment of FICA taxes resist not because of objections to the programs funded by the tax, but because the actual dollars all seem to go into one big pot, and some may be used by the Pentagon. Also, the temporary surplus income from the tax is invested (and borrowed) by the federal government for general purposes. On paper FICA taxes are tracked as a trust fund to be spent for Social Security and Medicare benefits, but a portion of every Social Security payment is placed into reserve investment in U.S. treasury bonds, thereby contributing indirectly to military spending.
Resisters should note that federal penalties, both civil and criminal, for refusing payment of Social Security taxes are the same as those for refusing payment of income taxes. When applying penalties, the IRS does not distinguish between income taxes and Social Security taxes, and it is not certain that the IRS distinguishes between the two taxes when processing payments. However, income tax resisters who file quarterly and/or annual returns do have their earnings credited to their Social Security account whether or not they pay their income taxes and Social Security/Medicare taxes.
Questions about Social Security may surface or resurface when resisters approach retirement age and must decide whether to apply for Social Security benefits. Some war tax resisters choose to remain outside of the Social Security system both at the contributing and receiving ends. Other resisters choose to participate in the Social Security program and are interested in knowing how eligibility is determined. Especially for those with low incomes and who are, therefore, likely to have little or no savings, pension, or health insurance, knowing one’s options can be helpful in terms of planning for the years when one may no longer be able to work.
Social Security Eligibility
(Detailed eligibility information is available from the Social Security Administration website, www.ssa.gov, or by calling 1-800-772-1213.)
Social Security retirement benefits are determined by a “credit” system. To be eligible to receive benefits, most people born in 1929 or later must have earned at least 40 credits over the course of their working life. Credits are based on your total wages and self-employment income during the year, and a maximum of four credits can be earned in a year. In 2015, one Social Security credit is gained for every $1,220 of earnings on reported income. Depending on your pay rate, it may take a few months or all year to earn four credits, and the 40 credits need not be earned in consecutive years. Generally, even low income workers will have earned Social Security eligibility with ten years of labor.
The amount of individual benefits is determined by the level of earnings and by the age at which one retires. Early retirement can be claimed at age 62. For those born before 1938, full retirement age is 65. The Social Security Administration is gradually increasing the full retirement age to 67 starting with people born in 1960. If you take early retirement, your monthly payment will be lower. The Social Security website, http://www.ssa.gov, has helpful calculators.
If you have contributed to Social Security you can find out your to-date Social Security record and estimates of your foreseeable retirement benefits by contacting the Social Security Administration and requesting your personal “Social Security Statement.”
Although Social Security is generally thought of as a retirement program, Social Security benefits also are available to many people who are disabled, or to a widow, widower, or dependents of a covered individual who has died. According to the Social Security Administration, approximately one out of every six Americans of any age receives some form of Social Security assistance.
Monthly payments are issued by direct deposit to your own bank account, or by a debit card system, “Direct Express”. Paper checks are no longer issued. With the debit card, the government creates an account for the recipient and deposits the funds there each month. A card is mailed to the recipient who can take it to any bank for one free withdrawal per month (no service fee) or use it at ATMs where a fee would apply after the first withdrawal. It can be used like any debit card to pay bills or make purchases.
Supplemental Security Income (SSI)
People over retirement age who are unemployed or marginally employed, without other sources of adequate income, and with limited financial resources, are entitled to receive Supplemental Security Income (SSI) payments bringing them up to a minimum threshold of cash income (which amounted to a total of about $733 for individuals and $1,100 for a couple per month in 2015). They are also entitled to Medicaid coverage, which will supplement any Medicare coverage they have, and will pay for almost all of their medical costs, including prescription drugs. SSI is a safety net program. Eligibility does not depend on whatever Social Security taxes may have been withheld before retirement. The program is administered by the Social Security Administration, though it is financed through income taxes rather than FICA withholding. SSI and most public assistance payments are exempt from IRS levies.
WTRs and the Social Security Application — Three Stories
Levies on Retirement Income
Social Security is protected from garnishment, levy or other withholdings by the federal government,except to enforce child support and alimony obligations; certain victim restitution penalties; with a Notice of Levy to collect overdue federal taxes (see Cathy Deppe’s story in the box below); through the Federal Payment Levy Program (FPLP) to collect overdue federal taxes; or to pay another federal agency for a non-tax debt (this could be a federal student loan from years previous).
War tax resisters with an IRS debt generally fall under the Federal Payment Levy Program, which was instituted in 2000 and is a continuous levy up to 15 percent of each monthly payment. (IRS Code Section 6331 (h)). We don’t know if every WTR with an IRS debt has had their Social Security garnished, but we do know WTRs who are living with this ongoing collection. One says, “At the rate of 15% they will never catch up with my refusing and redirecting 100% each year.”
The levy may start any time after you have received a Final Notice of Intent to Levy from the IRS. Generally the IRS will take 15% of each Social Security payments until your tax liability is paid in full. However, a number of war tax resisters in this situation have found that the levy comes and goes with no explanation.
There are some exceptions that will release the levy, including when you are in bankruptcy, have applied for relief as an innocent or injured spouse, made alternative arrangements to pay, or the IRS has determined you are in a hardship situation.
Social Security is paid out by direct deposit or a debit card. Some WTRs have had their bank accounts seized by the IRS, meaning that the IRS has essentially taken 100% of their Social Security funds if that is all that was in the bank. Withdrawing any directly deposited Social Security funds as quickly as possible and living on cash, or having a second account that is not used for direct deposit are ways to avoid seizure. Low income WTRs — including many living just on their Social Security payments — should challenge the IRS if their accounts are seized. Call the 800 number on the IRS form and/or call the Social Security Administration and explain your circumstances. A sympathetic agent may help to see that the levy is lifted, or there are more involved procedures for claiming hardship to have a levy released.
Retirement Savings & Levies
Many people trying to plan ahead ask about saving for retirement years. WTRs should be aware that accounts including Keogh, 401(k), IRA, SEP, and employer pension plans are all vulnerable to seizure by the IRS. One resister had his IRA seized by the IRS and was surprised to learn that the seized amount counted as income when he filed taxes for that year.
Funds in employer pension plans cannot be seized if they are not yet vested; when you have the right to take the benefits, they also become available to the IRS to seize for tax debts. The IRS is discouraged from taking retirement accounts. They will look for other sources first, but if it’s all they can find, there is the possibility that the funds will be seized. One resister who was living on limited income from Social Security and a teacher pension had both levied simultaneously for her tax debt; she called the IRS number on the levy and found a sympathetic agent who released the levy on the pension.
|Sample for those who file, using retirement contributions and credits:|
|Couple filing joint return (no kids)||with even more income|
|– (traditional) IRA deduction:||$6,000||$10,000|
|= Adjusted Gross Income:||$30,000||$36,000|
|– standard deduction||$24,000||$24,000|
|= Taxable income:||$6,000||$12,000|
|Retirement Savings Tax Credit:||$600 (max=$2,000)||$1,200 (max=$2,000)|
|Single person (no kids)||with even more income|
|– (traditional) IRA deduction:||$3,000||$5,000|
|= Adjusted Gross Income:||$15,000||$18,000|
|– standard deduction||$12,000||$12,000|
|= Taxable income:||$3,000||$6,000|
|Retirement Savings Tax Credit:||$300 (max=$1,000)||$600 (max=$1,000)|
|Once the AGI tops $19,000 (single) or $38,000 (joint) the maximum credit allowed drops dramatically, so it is more difficult to get as close to the desired maximum credit. You will have to experiment with the numbers to see if it helps to lower your taxable income and thus the amount paid in taxes.|
War tax resisters are wise to look ahead when it comes to estate planning, whether they expect to leave money or property behind or may inherit from family or friends.
Leaving An Estate
Generally, worries about federal estate taxes are unnecessary given that an estate under $11.2 million per person (2018) is not subject to federal estate taxes (state laws vary, and you can look those up online or at your library). It’s calculated that 99.8 % of estates owe no federal estate tax at all. This tax is subject to changes made by Congress, but the trend has been to cap the tax higher and higher, thus affecting fewer and fewer estates.
Even for the vast majority of estates that escape inheritance tax, there is the stage of “estate administration” between the time of death and the actual distribution to heirs. During this phase, the executor or administrator of the estate has the legal duty to pay the “just debts” of the deceased. If these include an accumulated tax liability, and the executor plays by the rules, the IRS could wind up being the sole beneficiary of many resisters’ estates, with the heirs taking nothing. Even if the executor does not voluntarily pay the deceased’s tax liability, the IRS could levy on estate assets, including bank accounts (although it seldom does so). And if the executor disregards the obligation to pay the tax debt before making distribution to heirs, under the law of most states the executor could be personally liable to pay that unsatisfied obligation of the deceased. Under no circumstances, however, would the heirs wind up liable. A resisted and unpaid tax obligation cannot be “passed down” or “inherited.”
However, this process of “estate administration” can be avoided by planning ahead. War tax resisters who have a tax liability and lien will want to set things up for direct transfers wherever possible. A will is not necessary, but if you die suddenly without a will and there is property to be distributed, then the courts will get involved and creditors will line up — the IRS being first in line. Some ideas for WTRs with tax debts include:
- give away as much as seems practical during their lifetimes (see below),
- set up bank accounts with a co-signer who can just take over the account,
- convert bank and retirement accounts to payable-on-death accounts , which go directly to the named beneficiary.
- hold property in joint tenancy or community property with right of survivorship (look up the information on these options).
- some types of trusts may allow a WTR to hold property without risk of seizure (see below).
A good source for more information is Nolo Law for All, nolo.com. See their website articles or books on estate planning, probate, and wills.
Gifting: The first $1,000 of gifts (in 2018) given by one person to another individual is not included in the total amount of taxable gifts made by the donor during that year. So mom can give her child $15,000 and dad can give $15,000 to that same child for a total of $30,000 per year. If that child is married, then the same gifts can be given to the spouse. The recipient of the cash gift does not include it in taxable income and does not have to report the gift as income. The donor would have to file a gift tax return if they give more than $15,000 in a given year to any one individual. The total of nontaxable gifts disbursed during a person’s lifetime is deducted from the amount that is exempt for estate tax purposes (see above, under “Leaving an Estate”) when the person dies. But since that amount is over $11 million, this factor will not affect many people.
Trusts: If you are concerned about leaving an inheritance for someone else, you can look into creating an irrevocable trust, in which you let go of ownership; the trust cannot be changed or canceled without the consent of the beneficiary. This type of trust could be set up by a WTR to provide an education fund for his/her children that would not be subject to seizure. A WTR might look into a personal residence trust for their home, which involves the transfer of a residence to a trust with the grantor (WTR) retaining the right to live in the residence for a fixed term of years. Upon the earlier of the grantor’s death or the expiration of the term of years, title to the residence passes to beneficiaries of the trust. Seek legal advice for these options to make sure they are set up under the laws of your state. Phony trusts that do not meet legal requirement are a favorite target of the IRS enforcement action and may even provide evidence of fraud sufficient to justify criminal charges. Any “trust” arrangement that leaves actual control, as well as benefit, in the hands of the grantor is unlikely to be legally valid.
Generally, property you receive as a gift, bequest, or inheritance is not included in your income and is not taxable. The IRS cannot take money from you until it is yours. If relatives plan to leave you money, but it is held in their name and Social Security number, there is no reason it should be vulnerable to seizure for your tax debt before it comes to you. One caveat: If you have a lien in your county and you may inherit in the same county, do some research about whether your lien will turn up in a probate process (that is, during estate administration) and before distribution of the inheritance. Since an IRS lien attaches to the resister’s “property and rights to property,” the lien can be enforced against an estate during the administration period (if the IRS learns of the estate), when a named beneficiary is a resister, to the extent of the beneficiary’s interest in the estate, to satisfy the beneficiary’s tax debt.
For WTRs with a tax debt, most of the “problems” arise once you have the money. Some WTRs will just accept that the IRS may take what they want from an account and that’s that. Others more intent on avoiding collection may want to do some advance planning.
- If possible, have a conversation with parents or grandparents (or whoever might want to leave you assets) about your war tax resistance and the questions you have about receiving an inheritance.
- Would you consider renouncing an inheritance when the time comes?
- Could another trusted family member hold your share of an inheritance?
- Would the estate holder be willing to talk with an accountant or lawyer about trusts or other options that might safeguard an inheritance for a WTR?
See the stories in this section and the NWTRCC resource list at the end of this booklet for other materials that cover this topic.
The bottom line is that there is no easy answer for war tax resisters who inherit assets and hope to keep money from the war machine. There is a good chance the IRS won’t know about your new assets before you get them, but once you receive the property, reports on interest, dividends, and such will be sent to the IRS at least at the end of the year in which they were received. We do not have experiences that tell us if the IRS will notice such a report and pursue an investigation.
If money is being held in trust for you, the WTR, you are or will become the owner, and as your asset it is vulnerable to IRS seizure. A trust must obtain a taxpayer identification number and file annual returns reporting its income and distributions to beneficiaries. The beneficiary is supposed to include the distributed income on their tax return. If you are a WTR with a debt to the IRS, a trust in your name and social security number is vulnerable to seizure to the same extent that you could access that trust if you wanted to.
Few inheritances come as cash, but you can take the money out of an account once it is received. However, be wary of the rules around cash withdrawals that will trigger bank reports and government attention. Banks and credit unions are required to report to the Treasury Department individual deposit or withdrawal transactions of currency (not personal checks) of more than $10,000 per transaction. To prevent such reports people may be tempted to withdraw or deposit cash money in amounts of $10,000 or less at any one time, with a larger total amount spread out over a period of weeks or months. Be aware, however, that engaging in this tactic for the purpose of evading the bank’s filing of a report is a federal crime called “structuring.” Even if the cash withdrawals are in amounts under $10,000, the bank is encouraged to report what it considers to be “suspicious transactions.” Even if criminal charges are not brought for structuring, substantial civil penalties are possible, as well as forfeiture of the structured funds.
When a person receives an inheritance of property such as stock or a house, they acquire the Fair Market Value of the property as of the date of death and would only have taxable income if they subsequently sell that property for a gain. For example, Ms. X had stock in a company that was worth $10,000 when she died. If her child, Ms. Y, inherited that stock three months later and the stock was worth $11,000 at that time, and Ms. Y sells the stock for $11,000 she would only have $1,000 of taxable income. If the stock lowered in value from the date the person died to when the child sold it, then none of the stock would be taxable. It is still important to note that the way one notifies the government that the sale of stock is not taxable or what amount is taxable is by filing a tax return. The same rule applies to inheriting a house and subsequently selling it.
Another cautionary note: The IRS considers transfers of assets after a “notice of intent to levy” illegal. There is also the potential of charges of fraud (either civil or criminal) if assets are placed in names that do not reflect true ownership.
We live in a culture where there is much emphasis on planning for your future by establishing a pension plan and retirement accounts as early as possible. Younger people looking at war tax resistance are often fearful about economic security over the long haul.
This booklet is based on the experiences of many WTRs who began resisting at a young age and found themselves figuring things out along the way. Some chose to live on a low income and keep themselves out of the system as much as possible; others make a taxable income, file, and refuse to pay some or all of their taxes to the federal government. In all cases, concerns about health care and income security grew as the decades added up.
Most resisters who persevere find that being in it for the long haul is not impossible and has many rewards, including, of course, feeling pretty good about keeping as much money away from war as they can. Relationships with family, friends, or an informal or intentional community are often strengthened as plans are worked out together.
The Affordable Care Act (ACA) forced a major update of this booklet. Health insurance is more generally available and affordable than at the time of our first edition in 2006. In some cases the ACA seems to benefit war tax resisters who are looking for legal ways to lower their income. For other resisters being forced to file or to file jointly as a couple has forced adjustments to their war tax resistance. And still others find that they still cannot afford healthcare and look for other alternatives.
Use the information in this booklet as a guide, but note that government programs and regulations may change, and many are so complicated that we could only give a general overview. Also, this booklet has addressed some of the federal regulations, but many of the areas covered also vary state-to-state, e.g., there might be state taxes on inheritances, the Affordable Care Act is not the same in all 50 states, etc. Verify all the facts and figures related to your own situation.
Please write to us if you have information to add, know about something we didn’t cover, or have a story to tell that will help others.
Health and Income Security, Government Resources
Affordable Care Act Marketplace. Get started at https://www.healthcare.gov, which will link to state exchanges where available.
Affordable Care Act (ACA) Tax Provisions, http://www.irs.gov/Affordable-Care-Act
Publication 5187, Health Care Law: What’s New for Individuals & Families, http://www.irs.gov/pub/irs-pdf/p5187.pdf
IRS Form 8965, Health Coverage Exemptions, http://www.irs.gov/pub/irs-pdf/f8965.pdf
IRS Form 8962, Premium Tax Credit (PTC), http://www.irs.gov/pub/irs-pdf/f8962.pdf
Medicare www.medicare.gov/ For general Medicare information, ordering Medicare booklets, and information about health plans, contact 1-800-MEDICARE 24 hours a day, 7 days a week for assistance.
Medicaid – http://medicaid.gov. Basic information about Medicaid and how to apply.
IRS Publication 502, Medical and Dental Expenses, including a section on Health Insurance Costs for Self-Employed Persons for use in preparing tax returns.http://www.irs.gov/pub/irs-pdf/p502.pdf
Health Savings Accounts: IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans, http://www.irs.gov/pub/irs-pdf/p969.pdf. Also see information on the “Don’t Owe Nothin’ Method” website at http://sniggle.net/TPL, use the search tool for HSAs and Obamacare.
Social Security Administration, http://www.ssa.gov. For full information about Social Security and SSI. A useful benefits calculator and retirement planner is on the website: 1-800-772-1213.
IRS Publication 559: “Survivors, Executors, and Administrators.” Publication 950: “Introduction to Estate and Gift Taxes.” IRS brochure: “Too Good to be True Trusts?” Available free from the IRS, 1-800-829-FORM, or on the internet: www.irs.gov.
Health Insurance Through Associations
For group rate health insurance or dental, vision care for members, here’s a list to get you started. You may want to compare prices and benefits with the Marketplace.
Graphic Artists Guild, (212) 791-3400, www.gag.org
National Association of the Self-Employed (NASE), www.nase.org, Phone: 1-800- 649-6273, P.O. Box 241, Annapolis Junction, MD 20701-0241
Procedures outside the U.S.: Search the internet on “medical tourism” and many options will pop up. Be sure to investigate thoroughly before deciding. Here are a few links to get you started:
International Medical Travel Journal (IMTJ), http://www.imtj.com, International Medical Travel Journal, Intuition Communication Ltd, 3 Churchgates, Wilderness, Berkhamsted, Herts HP4 2UB, United Kingdom
Patients Beyond Borders, PO Box 17057, Chapel Hill, NC 27516 USA, +1 919 924.0636 (GMT-5), http://www.patientsbeyondborders.com
“Should You Have Surgery Abroad?” AARP The Magazine, Includes a linke to a price comparison chart (11/2014), http://www.aarp.org/health/conditions-treatments/info-2014/medical-tourism-surgery-abroad.html
Center for Disease Control, http://www.cdc.gov/features/medicaltourism/
Alternatives and Community Living
Federation of Egalitarian Communities, www.thefec.org,. Contact number maybe change, but as of 2/06: (206) 324-6822 ext. 2
Fellowship for Intentional Community, RR 1 Box 156, Rutledge MO 63563-9720, 800-462-8240, http://www.ic.org. Publishes in online and print formats a Communities Directory, which includes a new section on retirement communities.
NOLO Law for All, Nolo Press, 950 Parker Street, Berkeley, CA 94710-9867,www.nolo.com. Website articles, publications and software offering legal information and do it yourself guidance for creating wills, trusts, estate planning, and much more. For those dealing with the IRS, and excellent resource is Stand Up to the IRS by Frederick W. Daily. 456 pp, 12th edition, January 2015.
War tax resistance alternative funds, like the CMTC Escrow Account mentioned in the text, in our Redirection page
War Tax Resisters Penalty Fund, http://www.wtrpf.org, mutual support fund for war tax resisters. WTRPF, 1036 North Niles Avenue, South Bend, IN 46617.
Available from NWTRCC:
- Practical #1: Controlling Federal Tax Withholding
- Practical #2: To File or Not To File an Income Tax Return;
- Practical #3: How to Resist Collection, or Make the Most of Collection When it Occurs
- Practical #4: Self Employment: An Effective Path for War Tax Resistance
- Practical #5: Low Income/Simple Living as War Tax Resistance
- Practical #6: Organizational War Tax Resistance
- Practical #7: Health Care and Income Security for War Tax Resisters
- Practical #8: Relationships and War Tax Resistance
(Single copies #1-3 $0.75 each, #4-8 $1.00 each. Call for bulk rates.)
War Tax Resistance: A Guide to Withholding Your Support from the Military, a comprehensive book on the subject. Published by War Resisters League, 5th Edition, March 2003 with annual update, 144 pages. ($6 postpaid)
War Tax Resisters and the IRS—a brief outline of WTR motivations, methods and consequences. ($2.50 each)
War Tax Resistance Network, regional listings of contacts, counselors, activists, and support groups. Free
This first edition of this “practical” was edited by Mary Loehr and produced by the National War Tax Resistance Coordinating Committee (NWTRCC), a coalition of local, regional, and national groups supportive of war tax resistance. Many others have since contributed to editing and updating it.
Printed copies are available for $1.00 each.
First published as Healthy, “Wealthy,” and Wise, 6/2006
Updated and published with new title 6/2015