The ultimate goal of the law is to give more Americans access to affordable, quality health insurance. Hereby the government has designed a functionality to define affordability, quality, and availability of private and public health insurance. For-profit health care Industry and their worst practices are regularized in favor of the public through this reform. Mandatory insurance for most Americans by 2015 and the opening of health insurance marketplaces for subsidized insurance are considered the most important provisions and expected to affect the tax situation of many.
Surf on these quick help questions to know how it affects your tax situation.
How to report Health Coverage to the IRS?
Everyone who has to file taxes for 2015 will have to at the very least report about the status of their health coverage throughout the year.
Whether you had health coverage all year, went without health insurance for more than 3 consecutive months, need to adjust MAGI for Premium Tax Credits, need to confirm an exemption, your business qualified for tax credits through the marketplace, or you were required to insure your employees but didn’t, you are required to report it on your Federal income tax return.
How to File Taxes if there is no Health Coverage?
If you didn’t obtain and maintain minimum essential coverage for at least 9 consecutive months throughout the year, you’ll need to make a Shared Responsibility Payment for each month you went without coverage, unless you obtained an exemption.
Why do I need health insurance information while doing my tax?
As a result of the Affordable Care Act, the IRS will begin demanding verification of a taxpayer’s current enrollment in some form of health insurance plan. It is important to report all required information to the IRS. If the plan changes in the future we will adjust accordingly and begin asking question effective immediately. Without being enrolled in one such plan also means a chance to miss a handsome saving.
What is Form 8965?
Form 8965- Health Coverage Exemption is used to report a coverage exemption that is either granted by the Marketplace or reported on your tax return. The form is also used to report any shared responsibility payments for not having health care coverage or exclusion for that month.
Who must file form 8965?
If you are obligatory to file a tax return and desire to claim a coverage exemption for yourself or another member of your tax household, the IRS requires you to file Form 8965.
How does Affordable Care Act affect my 2014 tax?
Individuals who file their tax for 2014 will be asked to show that they had insurance during the tax year 2014. You will have to include a few details about your insurance while filing your tax for 2014 and can stay calm. But it you don't have insurance, and then you could face a penalty on your taxes for 2014.
What are the important Dates and Deadlines for Affordable Care Act?
All taxpayers are expected to have health insurance coverage to avoid a possible fee on their 2016 taxes. November 1st, 2015 through January 31st, 2016 – The scheduled open enrollment period for tax year 2016, this can be done through the new Health Insurance Marketplace at www.healthcare.gov.
What is Affordable Care Act penalty?
Health insurance is now mandatory under the new health care law-the Affordable Care Act and avoiding doing so will incur the Affordable Care Act penalty to any Taxpayer. The amount of the penalty will lessen the 2015 tax refund or upturns the tax due on 2015 tax return that will be filed in 2016.
What are the conditions for availing Healthcare Penalty Exemption?
Here is a list of Healthcare Penalty Exemptions:
- Coverage is considered unaffordable - The amount you would have paid for employer-sponsored coverage or a bronze level health plan.
- Short coverage gap - You went without coverage for less than three consecutive months during the year.
- Household income below the return filing threshold - Your household income is below the minimum threshold for filing a tax return. Refer to the IRS Learn more about household income.
- Certain noncitizens - You are neither a U.S. citizen, a U.S. national, nor an alien lawfully present in the U.S.
- Members of a health care sharing ministry - Member of an organization described in section 501(c)(3) whose members share a common set of ethical or religious beliefs and have shared medical expenses in accordance with those beliefs continuously since at least December 31, 1999.
- Members of Federally-recognized Indian Tribes - You are a member of a federally-recognized Indian tribe.
- Incarceration - You were in a jail, prison, or similar penal institution or correctional facility after the disposition of charges during the year.
Income or coverage gap:
- Your gross income is below the filing threshold.
- Two or more family members' aggregate cost of self-only employer-sponsored coverage exceeds 8 percent of household income, as does the cost of any available employer-sponsored coverage for the entire family.
- You purchased insurance through the Marketplace during the initial enrollment period but have a coverage gap at the beginning of 2014. See this CMS Shared Responsibility Question and Answers.
- You are an American Indian, Alaska Native, or a spouse or descendant who is eligible for services through an Indian health care provider. Refer to the Centers for Medicare & Medicaid Services (CMS) Health coverage for American Indians & Alaska Natives.
- Members of certain religious sects - You are a member of a religious sect in existence since December 31, 1950, that is recognized by the Social Security Administration (SSA) as conscientiously opposed to accepting any insurance benefits, including Medicare and Social Security.
Other Circumstances Available Only through the Marketplace:
- You experienced circumstances that prevented you from obtaining coverage under a qualified health plan, including, but not limited to, homelessness, eviction, foreclosure, domestic violence, death of a close family member, and unpaid medical bills.
- You do not have access to affordable coverage based on your projected household income.
- You are ineligible for Medicaid solely because the State does not participate in the Medicaid expansion under the Affordable Care Act.
- You have been notified that your health insurance policy will not be renewed and you consider the other plans available as unaffordable.
What is 2015 Open Enrollment for the Affordable Care Act (ACA)?
The Affordable Care Act or the Obamacare is a new ruling that needs most Americans to have health insurance starting in 2014 or pay a penalty if they fail to have one. If you and your family have health insurance through your employer, a government-sponsored plan (such as Medicare, Medicaid, and Children’s Health Insurance Program-CHIP), Tricare for the military and their families, and other similar insurance plans, you don’t have to bother.
I am self-insured. How does it help me?
If you are self-insured, it means that your insurance provider will let you know if your plan meets the new requirements. You may cross check your status with your insurer and see what can be done to avoid shared responsibility payment. Sometimes you may receive a plan cancellation notice from your insurer if your plan does not meet the new law. We would advise you to stay informed and plan your coverage as per the new rule.
How to report Health Coverage to the IRS?
Citizens who file taxes for 2015 will have to report the status of their health coverage to the IRS. Taxpayer will be asked if they were covered throughout the year or were covered for a part of the year. The IRS will decide to impose or not a shared responsibility payment based on the facts given by the Taxpayer.
How to File Taxes for Not Having Coverage?
If a Taxpayer fails to maintain a minimum essential coverage for at least 9 consecutive months throughout the year, they will be subjected to the Shared Responsibility Payment for each month they went without coverage, unless they took an exemption.
What is the Annual Fee for not having Coverage?
For 2015 the annual fee is $325 per adult and $162.5 per child (up to $975 for a family) or 1% of the taxable income, whichever is greater.
How to check if my income qualifies for savings program led by Obamacare?
Check this listing to see the exact scenario that fits you best.
1 member household:
- Annual income is between $11,770 and $47,080- Taxpayer qualifies for lower premiums on a Marketplace insurance plan.
- Annual income is between $11,770 and $29,425- Taxpayer qualifies for lower premiums and out-of-pocket costs for Marketplace insurance.
- Annual income is below $16,243 and Taxpayer’s state is expanding Medicaid- Taxpayer qualifies for Medicaid coverage.
- Annual income is below $11,770 and Taxpayer’s state isn’t expanding Medicaid- Taxpayer may not qualify for any Marketplace savings programs.
2 member household:
- Annual income is between $15,930 and $63,720- Taxpayer qualifies for lower premiums on a Marketplace insurance plan.
- Annual income is between $15,930 and $39,825- Taxpayer qualifies for lower premiums and out-of-pocket costs for Marketplace insurance.
- Annual income is below $21,983 and Taxpayer’s state is expanding Medicaid- Taxpayer for Medicaid coverage.
- Annual income is below $15,930 and your state isn’t expanding Medicaid- Taxpayer may not qualify for any Marketplace savings programs.
3 member household:
- Annual income is between $20,090 and $80,360- Taxpayer qualifies for lower premiums on a Marketplace insurance plan.
- Annual income is between $20,090 and $50,225- Taxpayer qualifies for lower premiums and out-of-pocket costs for Marketplace insurance.
- Annual income is below $27,724 and Taxpayer’s state is expanding Medicaid- Taxpayer qualifies for Medicaid coverage.
- Annual income is below $20,090 and your state isn’t expanding Medicaid- Taxpayer may not qualify for any Marketplace savings programs.
4 member household:
- Annual income is between $24,250 and $97,000- Taxpayer qualifies for lower premiums on a Marketplace insurance plan.
- Annual income is between $24,250 and $60,625- Taxpayer qualifies for lower premiums and out-of-pocket costs for Marketplace insurance.
- Annual income is below $33,465 and Taxpayer’s state is expanding Medicaid- Taxpayer qualifies for Medicaid coverage.
- Annual income is below $24,250 and Taxpayer’s state isn’t expanding Medicaid- Taxpayer may not qualify for any Marketplace savings programs.
5 member household:
- Annual income is between $28,410 and $113,640- Taxpayer qualifies for lower premiums on a Marketplace insurance plan.
- Annual income is between $28,410 and $71,025- Taxpayer qualifies for lower premiums and out-of-pocket costs for Marketplace insurance.
- Annual income is below $39,206 and your state is expanding Medicaid- Taxpayer qualifies for Medicaid coverage.
- Annual income is below $28,410 and your state isn’t expanding Medicaid- Taxpayer may not qualify for any Marketplace savings programs.
6 member household:
- Annual income is between $32,570 and $130,280- Taxpayer qualifies for lower premiums on a Marketplace insurance plan.
- Annual income is between $32,570 and $81,425- Taxpayer qualifies for lower premiums and out-of-pocket costs for Marketplace insurance.
- Annual income is below $44,945 and Taxpayer’s state is expanding Medicaid- Taxpayer qualifies for Medicaid coverage.
- Annual income is below $32,570 Taxpayer’s state isn’t expanding Medicaid- Taxpayer may not qualify for any Marketplace savings programs.
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