Health Coverage Reporting Requirement
It’s always a good idea to prepare early to file your federal income tax return. Like last year, certain provisions of the Affordable Care Act affect your federal income tax return when you file this year.
Here are two things you should know about the health care law’s coverage and reporting requirements that will help you get ready to file your tax return.
Qualifying ACA Health Insurance Coverage
The Affordable Care Act requires that you and each member of your family have qualifying 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 check a box on their tax return to indicate that each member of their family had qualifying health coverage for the whole year. No further action is required. Use the chart on IRS.gov/aca to find out if your insurance counts as qualifying coverage.
E-File ACA Tax Coverage
You or your tax professional should consider preparing and filing your tax return electronically. Using tax preparation software is the easiest way to file a complete and accurate tax return. There are a variety of electronic filing options, including free volunteer assistance, IRS Free File for taxpayers who qualify, commercial software, and professional assistance.
Health Coverage Exemptions and Payments
The Affordable Care Act requires you and your dependents to have health care coverage, an exemption from the coverage requirement, or make a shared responsibility payment for any month without coverage or an exemption with your return. This law will affect your federal income tax returnwhen you file this year.
Here are five things you should know about exemptions from the health care law’s coverage requirement and the individual shared responsibility payment that will help you get ready to file your tax return.
- You may be eligible to claim an exemption from the requirement to have coverage and are not required to make a payment. If you qualify for an exemption, you will need to file Form 8965,Health Coverage Exemptions, with your tax return. You can claim most exemptions when you file your tax return. However, you must apply for certain exemptions in advance through theHealth Care Insurance Marketplace,
- If you receive an exemption through the Marketplace, you’ll receive an Exemption Certificate Number to include when you file your taxes. If you have applied for an exemption through the Marketplace and are still waiting for a response, you can put “pending” on your tax return where you would normally put your ECN.
- You do not need to file a return solely to report your coverage or to claim a coverage exemption.
Not Filing a Tax Return and ACA
If you are not required to file a federal income tax return for a year because your gross income is below your return filing threshold, you are automatically exempt from the shared responsibility provision for that year and do not need to take any further action to secure an exemption.
- If you file a tax return and your income is below the filing threshold for your filing status, you should use Part II of Form 8965, Coverage Exemptions for Your Household Claimed on Your Return, to claim a coverage exemption. You should not make a shared responsibility payment if you are exempt from the coverage requirement because you have income below the filing threshold.
- If you do not have qualifying coverage or an exemption for the year, you will need to make an individual shared responsibility payment for each month without coverage or an exemption when you file your return. Examples and information about figuring the payment are available on the IRS Calculating the Payment page
Premium Tax Credit and ACA
Under the Affordable Care Act, you may be eligible for the premium tax credit if you enrolled for health coverage through the Health Insurance Marketplace.
Here are three things you should know about the health care law’s premium tax credit that will help you get ready to file your tax return.
- If you bought coverage through the Health Insurance Marketplace, you should receive Form 1095-A, Health Insurance Marketplace Statement from your Marketplace by early February. Save this form because it has important information needed to complete your tax return.
IRS Form 1095-B and Form 1095-C
If you also receive Form 1095-B or Form 1095-C, which are unrelated to the Marketplace, see ourquestions and answers for information about how these forms affect your tax return.
- If you are expecting to receive Form 1095-A and you do not receive it by early February, contact the Marketplace where you purchased coverage. Do not contact the IRS because telephone assistors will not have access to this information.
- If you benefited from advance payments of the premium tax credit, you must file a federal income tax return. You will need to reconcile those advance payments with the amount of premium tax credit you’re entitled based on your actual income. As a result, some people may see a smaller or larger tax refund or tax liability than they were expecting. When you file your return, you will use IRS Form 8962, Premium Tax Credit (PTC), to calculate your premium tax credit and reconcile the credit with any advance payments.