Affordable Care Act Tax Provisions for Individuals and Families

Steve Ganns, https://gannsblog.wordpress.com, discusses Tax Provisions for Individuals and FamiliesThe Affordable Care Act (ACA) requires each and every member of every family to have qualifying health insurance; sometimes referred to as Minimal Essential Coverage.  You can be exempted from this requirement (for religious or other reasons), or else make a shared responsibility payment when you file your federal tax return. If you get insurance coverage through the Health Insurance Marketplace, you may be eligible for a coverage premium tax credit.

If you are like most people, you probably already have qualifying health care coverage. But if you don’t or don’t maintain coverage, you will have to get an exemption or make a payment with your 2014 tax return which you will be preparing at the beginning of next year.

If you don’t have coverage you might be able to get it through the Health Insurance Marketplace. If you do that, you may be eligible as I said above, for a coverage premium tax credit. That credit can actually be paid to your insurance company, to you as a refund, or as an offset payment on your federal taxes. For more information, see IRS Publication 5120.

If you receive advance credit payment and there are changes in your situation that affect your eligibility, you have to report those changes as soon as possible.

What to Do if You Don’t Have Coverage

If you don’t have coverage or you don’t qualify for an exemption, you will have to make what’s called an Individual Shared Responsibility payment when you file your income tax return. Many people are calling this the Health Care Tax. Feel free to call it whichever you like.

Generally, for 2014 the payment amount is the greater of 1% of your household income above your filing threshold of $95 per adult and $47.50 per child, limited to a family maximum of $285. You will report all this, your coverage, your exemption, or your payment on your federal income tax return. That is how the IRS will monitor this. There will be a form to fill out with your tax return indicating whether or not you had coverage and how many months during the year you had coverage.

As I said before, for more information please see IRS Publication 5120, go to your tax preparer or give us a call.

Did you sign up for Healthcare through the exchange?

Stephen J. Ganns

Stephen J. Ganns, CPA
914-682-7007
steve@gannscpa.com
www.gannscpa.com

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