2016 Affordable Care Act Tax Reminders

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The IRS has released some useful reminders when it comes to tax rulings and obligations around the Affordable Care Act, or Obamacare as it is more commonly known. For the vast majority of taxpayers providing proof of health insurance coverage (and avoiding a penalty) will simply mean checking a box to verify everyone on their return has health coverage.

The Affordable Care Act requires that a taxpayer and each member of their family either has qualifying health coverage for each month of the year, qualifies for an exemption, or makes an individual shared responsibility payment when filing their tax returns.

Check the box: Like last year, the vast majority of taxpayers will simply check a box on their tax returns to indicate that each member of their family had qualifying health coverage for the whole year. No further action is required to report coverage.

Claim a Coverage Exemption if you qualify: If you or anyone on your return did not have coverage for the entire year, you should determine if you qualify for one of the many coverage exemptions that are available.

File to reconcile Advance Payments of the Premium Tax Credit: If you enrolled in coverage through the Health Insurance Marketplace during 2015, you most likely received the benefit of advance payments of the premium tax credit. You must file a tax return and submit Form 8962 to reconcile these payments with the actual premium tax credit to which you are entitled. You will need Form 1095-A from the Marketplace to complete Form 8962. Failure to reconcile your advance payments of the premium tax credit on Form 8962 may make you ineligible to receive future advance payments.

Don’t wait for 1095-B/C: Many taxpayers will receive a Form 1095-B or 1095-C with information about their health care coverage. You may have heard that the IRS has extended the time for health coverage providers and employers to furnish these forms. You should be aware that you don’t have to wait for these forms in order to file your tax return and you don’t have to send these forms to the IRS. You can rely on other information to determine your health coverage.

Wait for Form 1095-A: If you enrolled in coverage through the Marketplace you should receive Form 1095-A from the Marketplace with important information that you need to accurately file your tax return. Unlike the Forms 1095-B and 1095-C, you should wait to file your tax return until you receive your Form 1095-A. Contact your marketplace with questions about your Form 1095-A.

Source : IRS 

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