The Affordable Care Act: What’s Trending
When it comes to the health care law – also known as the Affordable Care Act or ACA – and how it may affect your taxes, there are many questions you might have. This page offers news on trending topics and answers to questions we are hearing.
For Your Information…
New ACA Information Center for Applicable Large Employers (ALEs)
The IRS launched a new webpage where applicable large employers can find a complete list of resources and the latest news.
ACA 2014 Filing Season Statistics - July 2015
IRS Commissioner John Koskinen updated members of Congress on July 17 with preliminary results from the 2015 filing season related to Affordable Care Act provisions. See this link for the text of the letter.
Failing to file 2014 tax returns will prevent advance payments in 2016
The IRS reminds taxpayers who received advance payments of the premium tax credit in 2014 but who have not yet filed a tax return that they should file their 2014 tax return as soon as possible to continue receiving advance payments next year. Marketplaces will use information from these tax returns to determine eligibility for advance tax credit payments and cost-sharing reductions for the 2016 coverage year.
If advance payments of the premium tax credit were paid on behalf of you or an individual in your family in 2014, and you do not file a 2014 tax return, you will not be eligible for advance payments of the premium tax credit or cost-sharing reductions to help pay for your Marketplace health insurance coverage in 2016. This means you will be responsible for the full cost of your monthly premiums and all covered services. In addition, the IRS may contact you to pay back some or all of the 2014 advance payments of the premium tax credit.
If you missed the April 15 deadline or received an extension to file until Oct. 15, you should file your return as soon as possible. You should not wait to file. File now to reconcile any advance credit payments you received in 2014 and to maintain your eligibility for future premium assistance. You can file a federal return for free by using Free File.
Remember that filing electronically is the best and simplest way to file a complete and accurate tax return as it guides you through the process and does all the math.
People are asking…
The IRS hears many questions about the health care law. Here are commonly-asked questions that we are hearing from taxpayers and seeing on social media.
Q: I do not normally have to file a tax return. Why is the IRS telling me that I should file as soon as possible?
A. The IRS believes that you enrolled in health coverage through the Health Insurance Marketplace. If the government sent advance payments of the premium tax credit to your insurer, you are required to file a 2014 income tax return. If you do not file a 2014 income tax return, you will not be eligible for financial help next year. This means you will be responsible for the full cost of your monthly premiums. Do not wait to file. File now to stay eligible for future premium assistance.
A. The IRS believes that you enrolled in health coverage through the Health Insurance Marketplace. If the government sent advance payments of the premium tax credit to your insurer, you are required to file a 2014 income tax return. If you do not file a 2014 income tax return, you will not be eligible for financial help next year. This means you will be responsible for the full cost of your monthly premiums. Do not wait to file. File now to stay eligible for future premium assistance.
Q. My income is below the threshold to be required to file a tax return, but advance payments of the premium tax credit were sent to my insurance company in 2014 to help pay my monthly premium; do I need to file a tax return?
A. Yes, you are required to file a tax return. If advance payments of the premium tax credit were paid for you or an individual in your tax family, you must file a tax return to reconcile the difference between the advance credit payments made on your behalf and the actual amount of the credit that you may claim. This requirement applies whether or not you would otherwise be required to file a return. File as soon as you can even if you missed the April 15 deadline. If you missed the April 15 deadline or you received an extension to file until Oct. 15, you should file your return as soon as possible. You should not wait to file. File now to reconcile any advance credit payments that were made for you or a member of your tax family in 2014 and to maintain your eligibility to get advance credit payments for your 2016 coverage.
If you don’t file a 2014 tax return, you will not be eligible for advance payments of the premium tax credit to help pay for your Marketplace health insurance coverage in 2016. This means you will be responsible for the full cost of your monthly premiums and all covered services.
You should file your 2014 tax return with Form 8962 as soon as possible even if you don’t usually have to file. You should have received Form 1095-A from your Marketplace. This form provides the information you will need to complete Form 8962. If you need a copy of your Form 1095-A, go to HealthCare.gov or your state Marketplace website and log into your Marketplace account or call your Marketplace call center.
Q. I filed my return claiming the premium tax credit. Why did I get a letter from the IRS asking for more information and a copy of my 1095-A?
A. You do not have to send your Form 1095-A to the IRS with your tax return when you file and claim the premium tax credit. However, using the information on your Form 1095-A you must complete and file Form 8962, Premium Tax Credit. The IRS verifies the information on your Form 8962 by comparing it to information received from the Marketplace and to other information you entered on your tax return.
In some situations, before we can send your refund, the IRS may send you a letter asking you to clarify or verify information that you entered on your income tax return.The letter may ask for a copy of your Form 1095-A.
Some common examples of issues or questions that may arise are:
- It appears that you are required to reconcile but did not include Form 8962.
- You submitted Form 8962 but it is incomplete.
- Based on the income that you reported, it appears that you are not eligible for the credit.
- The income or other entries on your Form 8962 are inconsistent with information on your tax return.
- The premium that you entered on your Form 8962 appears to be an annual amount, rather than monthly.
- There are questions about entries on your Form 8962 that may be clarified by a review of your 1095-A.
- We need to review your Form 1095-A to verify your Marketplace coverage.
You should follow the instructions on the correspondence that you receive in order to help the IRS verify information that has been entered on the tax return and issue the appropriate refund. For more information about Forms 1095-A, visit our Health Insurance Marketplace Statements page.
Q. What documentation or proof of insurance coverage do I have to submit with my return?
Q. What documentation or proof of insurance coverage do I have to submit with my return?
A. You do not need to attach documentation or proof of insurance coverage to your tax return. If you had coverage for yourself and everyone in your household for the entire year, you or your preparer will check a box on your tax return. Although nothing in the IRS rules or regulations require you to provide proof of coverage at the time you file, if you have documents that verify your coverage, you should show them to your tax preparer. The IRS will follow its normal compliance approach to filed tax returns, and may ask you to substantiate the information on your tax return, therefore you should keep these documents with your tax records. Learn more about the types of documents you should keep at our Gathering Your Health Coverage Documentation page.
Q. Does everyone need to have health insurance coverage?
Q. Does everyone need to have health insurance coverage?
A. The Affordable Care Act requires you and each member of your family to have basic health coverage (called minimum essential coverage), qualify for an exemption from the requirement to have coverage, or make an individual shared responsibility payment when you file your federal income tax return. If you are not required to file a tax return and don’t want to file a return, you do not need to file a return solely to report your coverage or to claim an exemption.
