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Health Care Reform and Taxes: Preparing for the 2014 Tax Season
As individuals begin to prepare the necessary documents to submit to the Internal Revenue Service (IRS) this tax season, they will need to be prepared to address an additional question in that process. Filers must prove they have health insurance or face a penalty. For 2014, the penalty is either $95 per uninsured person or 1 percent of an individual’s household income, whichever is greater.
A majority of people whose coverage remains unchanged with stable employer coverage will need to check a box verifying they had health coverage throughout 2014. However, those who received coverage through a health insurance marketplace will have to attach a 1095-A form, which will provide information on the total monthly premium that an individual paid, as well as the tax credits received. The IRS will use this information to determine whether individuals have been receiving the appropriate tax credit based on their household income in 2014.
The health insurance marketplaces are responsible for sending the 1095-A forms to consumers, and they must be sent out by January 31 so that consumers will receive them in early February. While the marketplaces work on sending out the 1095-A forms, the federal government, states, and tax preparers have been conducting outreach and developing resources to help prepare consumers for this new filing requirement. Below is a sampling of the latest ACA-related tax resources.
Federal Resources:
- Centers for Medicare and Medicaid Services (CMS):Form 1095-A Frequently Asked Questions (FAQs)
- CMS: 1095-A Form Webinar for Navigators and Assisters
- Tools for Calculating Premium Tax Credits and Claiming Affordability Exemption
- Internal Revenue Service: Health Care Law: What’s New for Individuals & Families
State-Based Marketplace Resources:
- Covered California: FAQs
- Kynect: Tax Form 1095-A Quick Reference Guide for Consumer Assisters
- HealthSource RI: Consumer FAQs for the 2014 Tax Season
- NY State of Health: Tax Credits and 1095-A webpage, including 1095-A cover letters, FAQs, a guide to 1095-A forms, and tax information in a variety of languages
- Washington Healthplanfinder: 1095 webpage
Additional Resources:
- Center on Budget and Policy Priorities: The Health Care Assister’s Guide to Tax Rules andResources for Tax Preparers
- Enroll America: Successfully Navigating the Tax Filing Moment Webinar
- H&R Block: Health Care and Taxes Resources
- Intuit: Guide to Health Care and Taxes
- Vermont Law Help: Tax Resources for Assisters