Affordable Care Act :: Wamhoff Financial & Accounting


Affordable Care Act

The Affordable Care Act, is also known as Obamacare. Under Obamacare’s individual shared responsibility provision, you must let the IRS know when you file that you had the required minimum essential health care coverage or were exempt. If you have qualified coverage, you’ll get a Form 1095-C from your employer or a Form 1095-B from the insurer. In these cases, you’ll simply check a box on your tax return.

However, if you or anyone in your family doesn’t have the required coverage or aren’t exempt, you’ll have to pay a penalty when you file your return. Both exemption claims and penalty calculations are made on new Form 8965.

Then there’s the premium tax credit. This is a way of helping certain taxpayers pay for required insurance they obtained through a health care exchange. Some individuals got advance payment of this credit when they got coverage.

If you discovered that when you filed your 2014 return that your premium tax credit was off, make sure that doesn’t happen this filing season. Changes in your life affect how much of a health coverage credit you can claim. Report changes to the health care exchange where you purchased coverage as soon as they occur so that your advance credit payments can be adjusted. This will help you avoid getting a smaller refund or owing money that you didn’t expect to owe when you file.

Among the things that could make a tax credit difference are a birth or adoption, marriage or divorce, moving, job change, and increase or decrease in your household income. These changes also may allow you to take advantage of a special enrollment period — 60 days from the date of the life event — during which you can make health care plan changes.

Reference: www.bankrate.com/finance/taxes/tax-tips