02.03.2015
Here is a discussion/ Q&A on the continuing applications for the ACA from the IRS!
When it comes to the health care law – also known as the Affordable Care Act or ACA – and how it may affect your taxes, there are many questions you might have. This page offers news on trending topics and answers to questions we are hearing.
For Your Information…
Penalty relief related to advance payments of the premium tax credit for 2014
Starting this year, just like taxpayers reconcile their tax withholding with their actual tax liability and get refunds or make an additional payment accordingly, individuals benefiting from tax credits for Marketplace coverage will follow the same process. Normally, taxpayers may owe certain penalties for late payments or underpayment of estimated tax. However, to help smooth the process for the first year of the Affordable Care Act, the IRS will waive these penalties for eligible taxpayers if they resulted from repayment of excess advance payments of the premium tax credit for Marketplace coverage. Learn more about Notice 2015-09 , Penalty Relief Related to Advance Payments of the Premium Tax Credit for 2014 (Jan. 26, 2015), on our Premium Tax Credit page. This has no effect on the fee individuals will pay if they chose not to buy affordable health coverage.
Taxpayers should get Form 1095-A from the Marketplace by early February
If you or anyone in your household enrolled in a health plan through the Health Insurance Marketplace in 2014, you’ll get one or more Form 1095-A, Health Insurance Marketplace Statements. These important tax documents will come from your federal or state Marketplace, not the IRS. You should not prepare a Form 1095-A for yourself.
You will receive the form in the mail from the Marketplace by early February. And, you will use the information from the form to calculate the amount of your premium tax credit (PTC), to reconcile any advance credit payments sent on your behalf to your insurance provider and to file your tax return.
You should wait to receive your Form 1095-A before filing your tax return. It is important that you have Form 1095-A in your possession before you file to ensure that you file a complete and accurate return.
IRS issues updates on how the Health Care Law will affect this year’s tax return
(Following links provided at IRS.gov! )
Affordable Care Act - What to Expect at Tax Time
Info Graphic - The Health Care Law and Your Taxes
Affordable Care Act and Taxes - At a Glance charts
IRS releases first Health Care Tax Tip for 2015
Health Care Tax Tip 2015-01, Health Care Law Brings Changes to IRS Tax Forms, explains the changes to tax forms related to the Affordable Care Act. Along with a few new lines on existing forms, there will also be two new forms that will need to be included with some tax returns. Subscribe to IRS Tax Tips to get easy-to-read tips via e-mail from the IRS.
IRS issues two new publications explaining how the Health Care Act may affect your tax return
Publication 5193 – Preparing your Federal Tax Return: Claiming and Reporting Health Coverage Exemptions, explains what you need to know about health coverage exemptions, how to claim them and how to report them on your tax return. And, Publication 5195 – The Premium Tax Credit and Your Tax Return, explains how the credit will be claimed or reconciled on your tax return.
People are asking…
The IRS hears many questions about the health care law. Here are commonly-asked questions that we are hearing from taxpayers and seeing on social media.
Q. What documentation or proof of insurance coverage do I have to submit with my return?
You do not need to attach documentation or proof of insurance coverage to your tax return. If you had coverage for yourself and everyone in your household for the entire year, you or your preparer will check a box on your tax return. Although nothing in the IRS rules or regulations require you to provide proof of coverage at the time you file, if you have documents that verify your coverage, you should show them to your tax preparer. The IRS will follow its normal compliance approach to filed tax returns, and may ask you to substantiate the information on their tax returns, therefore you should keep these documents with your tax records. Learn more about the types of documents you should keep at our Gathering Your Health Coverage Documentation page.
Q. Does everyone need to have health insurance coverage?
A. The Affordable Care Act requires you and each member of your family to have basic health coverage (called minimum essential coverage), qualify for an exemption from the requirement to have coverage, or make an individual shared responsibility payment when you file your federal income tax return. If you are not required to file a tax return and don’t want to file a return, you do not need to file a return solely to report your coverage or to claim an exemption.
Visit our Individual Shared Responsibility Provision page for information about what coverage qualifies, and our Exemptions page for details about who is eligible for an exemption from the requirement to have coverage.
Q. My employer gives me the option of buying insurance through my job, but I can’t afford the premiums. Can I get insurance and financial assistance from the Marketplace?
A. You may have the option of purchasing insurance through the Marketplace. However, you will not be eligible for financial assistance in the form of the premium tax credit if the insurance offered by your employer is considered ‘affordable’ according to the health care law. An employer-sponsored plan is affordable if the portion of the annual premium you must pay for self-only coverage does not exceed 9.5 percent of your household income for 2014 (the 9.5 percent is indexed for inflation). If you enroll in an employer-sponsored plan – including retiree coverage – you are not eligible for the premium tax credit, even if the plan is unaffordable or fails to provide minimum value.
Q. I don’t have a tax-filing requirement, but want to claim the premium tax credit; do I need to file a tax return?
A. If you want to claim the premium tax credit, you must file a federal income tax return. In addition, if you receive advance payments of the premium tax credit, you must file a tax return and use your return to reconcile the difference between the advance credit payments made on your behalf and the actual amount of the credit that you may claim. This requirement applies whether or not you would otherwise be required to file a return.
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Source information at IRS.gov. For the latest in tax news and updates, please follow us on Facebook/Twitter/Blogger and our website!
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