Health Care Basics For Preparing Your Clients Returns

Health Care Basics

Similar to last year, meeting the tax obligation of the Affordable Care Act for the vast majority of taxpayers will simply mean checking a box to verify everyone on their return has health coverage. For others, IRS.gov/aca features useful information, tips and interactive online tools to help taxpayers with the premium tax credit, the individual shared responsibility requirement, and other tax features of the ACA.

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.

Here Are Some Important ACA Reminders:

• Check the box: Like last year, the vast majority of 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 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. You can use our online interactive tool to help determine if you qualify.
• 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. The IRS has additional information about these forms in questions and answers on IRS.gov/aca.
• 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.

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