The Affordable Health Care Act and Federal Income Taxes

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 The April 15th federal income tax filing deadline is fast approaching. If you haven’t filed yet, there are some tax requirements you need to know about for any Health Insurance Marketplace Coverage purchased in 2014. Whether you bought health care insurance in 2014 or did not, there may be some changes in filing your federal income taxes that you will need to know about.

Affordable Health Care Requirements

The Affordable Health Care Act requires that you have health care coverage for you and family members living in your household for each month of the year unless you have an exemption or make a special “shared responsibility payment” when you file your 2014 federal income tax return. Your health insurance plan must meet the minimum requirements of the Affordable Health Care Act. Coverage provided by these types of plans does not qualify for minimum essential coverage:

  • Workers’ Compensation
  • Accident or Disability Income Insurance
  • Vision or Dental Insurance Stand Alone Policies
  • Limited Coverage Medicaid Plans

The IRS Affordable Health Care Act Publication explains in fuller details about the minimum health care insurance requirements of the Affordable Health Care Act.

If You Do Not Have Health Care Insurance

Open enrollment for 2015 coverage is over. However, you may still have options to get coverage through the Marketplace, Medicaid or CHIP.

You can find out about healthcare coverage options at HealthCare.gov. If you do not have health care insurance, you may qualify for an exemption. If you do not qualify for any of the exemptions, you will likely have to pay a fee with your federal income tax return. This fee is based on how many months of 2014 you were without coverage and on your income.

Depending on your circumstances, you may qualify for an exemption. Exemptions are available in certain cases for changes to your financial status, group memberships and other life event changes. You can find out more about whether you can qualify for an exemption through using the HealthCare.gov Coverage Exemptions Tool.  You will be directed to answer questions about your exemption status and then get step-by-step instruction on how to apply including the forms you will need. The form for Health Coverage Exemptions is called Form 8965.

If You Purchased Health Care Insurance through the Health Insurance Marketplace

If you purchased health insurance coverage for you or your family this year through the Health Insurance Marketplace, you will receive a form 1095-A Health Insurance Marketplace Statement. Keep this form because you will need it when completing your federal incomes taxes. This form contains information above who in your family is enrolled and the monthly premiums you paid for your health insurance plan. If you filed your taxes before you received your Form 1095-A, you’ll need to complete an amended return.

If the premium tax credit you claimed when providing an estimate of your 2014 income is different based on your actual income, you’ll need to use Form 8962 – Premium Tax Credit to reconcile your tax credit amount.

You can complete this using tax preparation software or a professional tax preparer can complete this form for you.

Even if you are not normally required to file a federal income tax return, if you want to claims the premium tax credit, you will have to file a tax return. If you need help with filing your federal income taxes or in understanding how the Affordable Health Care Act affects your taxes, you may be able to receive assistance through the IRS Volunteer Income Tax Assistance (VITA) program. This is a program that helps people who have less than $53,000 yearly income, who speak limited English, persons with disabilities and the elderly with federal income tax preparation.