HHS, Treasury provide resources for surviving tax season

The Departments of Health and Human Services and the Treasury (the Departments) have released a fact sheet that provides resources for tax filers to help them understand how health care intersects with their taxes. The Departments noted that reporting information about health coverage is still a new process, but it will soon feel like a routine part of tax season.

Individual mandate. Under Act Sec. 1501 of the Patient Protection and Affordable Care Act (ACA), a penalty is imposed on all applicable individuals for each month they fail to have minimum essential health coverage for themselves and their dependents. Similar to last year, the Departments noted that the vast majority of taxpayers will just need to check a box on their tax return to indicate they had coverage throughout 2015.

Mark Mazur, Treasury Assistant Secretary for Tax Policy, noted, “While this is only the second year that taxpayers need to report information about their health coverage when filing their income tax returns, we expect that these requirements will soon become a routine part of tax time. The vast majority of Americans simply need to check a box on their tax return to indicate they had health coverage all year. Others who chose not to purchase health insurance may have to pay a fee, or can claim an exemption if they qualify.”

Source of coverage. Tax filers with coverage through the health insurance marketplaces will receive Form 1095-A from the marketplace. The Departments cautioned that now that individuals know their actual income for the year, they need to reconcile the difference between the amount of financial assistance they received during the year to help lower the cost of their premiums with the actual amount they should have received based on their 2015 earnings. Form 1095-A is designed to help individuals make this determination.

“Because of the Health Insurance Marketplaces, millions of Americans have gotten the security that comes with having quality, affordable health insurance,” said Kevin Counihan, CEO of the Health Insurance Marketplace. “With most of these consumers receiving tax credits to make their monthly premiums more affordable, it’s important that we do everything we can to arm these consumers with the information they need to better understand their responsibilities when it comes to filing their taxes.”

Consumers with non-marketplace coverage will receive either a Form 1095-B or a Form 1095-C from their employer or health plan, describing the coverage they had for the year. The IRS recently extended the deadlines for employers to fill out these forms, so the Departments emphasize that consumers do not need to attach this information to their tax return or wait to receive the form before filing their return.

Tools are available for individuals who have questions about their tax filing responsibilities under the ACA. General resources can be found at www.IRS.gov/Affordable-Care-Act or www.HealthCare.gov/taxes/.

SOURCE: Fact sheet, January 20, 2016.

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