New tax regulations included in the Affordable Care Act will affect your personal income tax return when you file this year. Each member of your family eligible to be claimed as a dependent on your tax return must have minimum essential health insurance coverage for each month of the year, qualify for an exemption from the coverage requirement, or make an individual shared responsibility payment when filing your federal income tax return.
Most taxpayers will simply have a box checked on their tax return to indicate that each member of their family had the required health coverage for the whole year. For a limited group of taxpayers – those who qualify for, or received advance payments of the premium tax credit – the health care law could affect the amount of tax refund or the amount of money they may owe when they file in 2015.
If you bought coverage through the Marketplace, you should receive Form 1095-A, Health Insurance Marketplace Statement, from the Marketplace by early February. Save this form because it is important information needed to complete your tax return. If you are expecting to receive Form 1095-A and do not receive it by early February, contact the Marketplace where you purchased the coverage.
If you are eligible for an exemption, we will need to complete the new IRS Form 8965, Health Coverage Exemptions, when preparing your return. Most of the exemptions are obtained from the IRS when filing the return. However, some exemptions are only available from the Marketplace. If you receive an exemption through the Marketplace, you’ll receive an Exemption Certificate Number for us to include on your tax return.
For taxpayers who benefited from advance payments of the premium tax credit, the new IRS Form 8962, Premium Tax Credit, will be used to calculate your premium tax credit and reconcile the credit you’re entitled to based on your actual income with the advance payments received.
If you do not have qualifying coverage or an exemption for each month of the year, you will need to make an individual shared responsibility payment upon filing your return for choosing not to purchase coverage. For 2014, the annual payment amount is the greater of 1% of your household income that is above the tax return filing threshold for your filing status, or your family’s flat dollar amount, which is $95 per adult and $47.50 per child, limited to a family maximum of $285.
Additional information about the Affordable Care Act and your 2014 income tax return is available at the IRS’s website www.IRS.gov/aca.
If you have any questions regarding this information, please contact our office at (239) 433-5554. We would be happy to assist you with any questions you may have concerning the Affordable Care Act and how it may affect your tax return. You may also visit us on the web at www.markham-norton.com.