The health care law will bring some changes to the 2014
federal income tax return that individuals file in 2015. This year marks the
first time that taxpayers will be asked questions related to health care
coverage.
Most taxpayers simply need to check a box indicating they
had qualifying health care coverage for the entire year. Some taxpayers will
have to file a new form to claim an exemption from the requirement to have
health care coverage. Taxpayers who do not have qualifying health care coverage
and who do not qualify for an exemption will need to make an individual shared
responsibility payment when they file their tax returns. Some taxpayers who
enrolled in coverage through the Marketplace may qualify for a premium tax
credit and must file a tax return to claim the credit and to reconcile any
advance payments made on their behalf in 2014.
The IRS does not require taxpayers to submit documentation
of health coverage with their tax returns. However, gathering documentation in
advance will help return preparation at tax time.
This year, unless a taxpayer purchased coverage from the
Marketplace, many people will not receive tax information documents related to
their health coverage. Next year, however, people who have qualifying health
care coverage will receive tax information documents that are comparable to
Forms W-2 and 1099. Individuals that purchased coverage through the Health
Insurance Marketplace, should receive Form 1095-A, Health Insurance Marketplace
Statement by early February.
Documentation individuals can gather
in advance:
Proof of Insurance
Taxpayers are not required to send in proof of health care
coverage to the IRS when filing their tax return. However, it’s a good idea to
keep these records on hand to verify coverage. This documentation includes
insurance cards, explanation of benefits statements from your insurer, W-2 or
payroll statements reflecting health insurance deductions, records of advance
payments of the premium tax credit and other statements indicating that you, or
a member of your family, had health care coverage. While your employer may be
able to assist you in verifying your coverage, your employer is not required to
provide documentation specific to your health care coverage for the 2014 tax
year.
Documents supporting
exemptions and hardships
Anyone who qualifies for a health coverage exemption will
need to apply through the Marketplace or claim the exemption on his or her tax
return. Individuals may need information to support their coverage exemption
claim. This includes documentation to support a hardship, income documents,
social security information, and household information. If an exemption
application is granted by the Marketplace the applicant will receive a notice
with a unique Exemption Certificate Number, also known as an ECN. The ECN will
be entered in Part I of Form 8965, which must be filed with the tax return.
Individuals who do not currently have their ECN, but who have applied for an
exemption through the Marketplace, should enter the word “PENDING” in the place
of the ECN in Part I of Form 8965. If you are claiming an exemption on your tax
return, you do not need an ECN.
1095-A, Health
Insurance Marketplace Statement
If you or your family had coverage through a Marketplace the
Marketplace will send you information about the coverage on Form 1095-A. The
Marketplace should mail these forms by early February. The form will show
details of an individual’s insurance coverage such as the effective date,
amount of the premium, and the advance payments of the premium tax credit or
subsidy. Individuals will use the information on Form 1095-A to complete Form
8962, Premium Tax Credit (PTC) in order to claim the premium tax credit or to
reconcile advance credit payments on the federal tax return.
Individuals may receive more than one Form 1095-A if anyone
in their households switched plans in 2014 or reported life changes (such as
getting married or having a baby) after their coverage began, or if they had
more than one policy covering people in the same household. Individuals will
get a Form 1095-A even if they only had Marketplace coverage for part of 2014.
Taxpayers who receive a Form 1095-A in the mail from the
Marketplace should check to make sure the information matches their records,
including items like the start and end dates of their coverage and the number
of people in their household. Anyone who believes the information on the Form
1095-A is incorrect, should contact the Marketplace or visit
HealthCare.gov/taxes to find out how to get a corrected Form 1095-A.
Free File and e-file
help Simplify Tax Time
All taxpayers who are reporting coverage, claiming a health
coverage exemption, making an individual shared responsibility payment, or
claiming the premium tax credit should consider filing their tax return
electronically. E-filing a tax return is the simplest way to file a complete and
accurate tax return as it guides individuals through the process and does all
the math for them.
Electronic Filing options include free Volunteer Assistance,
IRS Free File, commercial software and professional assistance.
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