The Healthcare Law’s Impact on Your Taxes
You may not realize that the Affordable Care Act impacted more than your healthcare options and insurance costs. It also made changes to the 2014 tax returns that you file this year adding many new forms to fill out and questions to answer. If everyone in your household had health insurance coverage for all of 2014 through your employer, the good news is you likely just need to check a box on your return. For everyone else, things may not be that simple.
If you purchased coverage through the Marketplace, you may have received an advance of the premium tax credit that reduced your insurance premiums. But, did you know you may be required to pay some (or all) of it back when you file your tax return, or you could get a larger credit resulting in a decrease of your taxes?
If you did not have proper insurance coverage for all of 2014, you are subject to a penalty that will be added to the taxes on your federal tax return. Of course there are exceptions, but how do you know if you meet one of them? And, if you do qualify for an exception, do you need an Exemption Certificate Number? If so, how do you get it?
Confused yet? Don’t worry, the IRS has published a “simple” chart to make all of this clear, see below. If your head is still spinning after reviewing the not-so-simple chart, consider working with a professional to prepare your tax returns (and stop the spinning.)
| IF YOU… | THEN YOU… |
| And everyone in your tax household had health coverage for the entire year | Will simply check the box on line 61 of Form 1040, line 38 of Form 1040-A, or line 11 of Form 1040-EZ |
| Enrolled in health insurance through the Marketplace | Should receive a Form 1095-A Health Insurance Marketplace Statement from the Marketplace |
| Received a Form 1095-A, Health Insurance Marketplace Statement, showing you received the benefit of advance payments of the premium tax credit in 2014 | Must file a tax return in 2015 and reconcile the advance payments with the amount of the premium tax credit allowed on your return. |
| Need to reconcile the advance payments of the credit with the credit allowed | Make the calculations using IRS Form 8962 Premium Tax Credit (PTC) |
| Must repay any excess advance payments of the premium tax credit | Must report the information on line 46 Form 1040 or line 29 of Form1040-A, and cannot file Form 1040-EZ |
| Are claiming the premium tax credit and did not benefit from advance payments of the premium tax credit | Must file a tax return and IRS Form 8962, Premium Tax Credit (PTC) |
| Did not receive a Form 1095-A, Healthcare Insurance Marketplace Statement,from the Marketplace | Should contact the state or federal Marketplace through which you enrolled |
| Are claiming an exemption from the requirement to have health coverage for anyone on your tax return | Will complete Form 8965, Health Coverage Exemptions,and submit it with your tax return |
| Still need to obtain a religious conscience exemption or a hardship exemption that can only be granted by the Marketplace | Should file an application with the Marketplace and follow the instructions below about how to report exemptions from the Marketplace on your tax return |
| Obtained an exemption from the Marketplace, and received your unique Exemption Certificate Number | Will enter the Exemption Certificate Number in Part I of Form 8965, Health Coverage Exemptions, and submit the form with your return |
| Applied for an exemption from the Marketplace, but do not currently have an Exemption Certificate Number | Will enter ‘PENDING’ in Part I of Form 8965 Health Coverage Exemptions, and submit the form with your return |
| Are claiming an exemption that can be granted only from the IRS | Will not need an Exemption Certificate Number, but will complete Parts II and III of Form 8965, Health Coverage Exemptions, and submit the form with your return |
| Are able to obtain the exemption from either the IRS or the Marketplace | Should obtain the exemption from the RS by completing Part II and III of Form 8965,Health Coverage Exemptions, and attach this form to your federal tax return when you file |
| Are making a shared responsibility payment because you did not have health coverage or qualify for an exemption for any month in 2014 | Will enter the payment amount on line 61 of Form 1040, line 38 of Form 1040-A, or line 11 of Form 1040-EZ |