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US Provides Fact Sheet On Health Tax Obligations

by Mike Godfrey, Tax-News.com, Washington

22 January 2016


With the beginning of the 2016 individual tax filing season, the US Department of Health and Human Services and the Treasury Department have issued a fact sheet on how the Affordable Care Act's (ACA's) provisions affect tax returns, and on the Administration's resources available to help taxpayers.

Treasury Assistant Secretary for Tax Policy Mark Mazur and Kevin Counihan, the CEO of the Health Insurance Marketplace, released statements on January 20 to provide an overview of the consumer support and assistance the Administration will provide.

Mazur stated: "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. We are working to ensure that consumers can easily access clear information on what the requirements mean for them as they prepare to file their taxes."

Counihan added: "Because of the Health Insurance Marketplaces, millions of Americans have gotten the security that comes with having quality, affordable health insurance. 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."

"With less than two weeks before the final January 31 deadline for 2016 coverage," he added, "it's also important that every uninsured American understands their options for finding affordable health coverage so they don't risk paying a penalty of USD695 or more for not having coverage in 2016."

It was confirmed that those with Marketplace coverage will receive a tax statement in the mail from the Marketplace called a Form 1095-A. As taxpayers now know their final income for the 2015 fiscal year, they need to reconcile the difference between the amount of premium tax credit they received during the year to help lower the cost of their premiums, with the actual amount they should have received based on their annual earnings. Consumers who do not file a tax return to reconcile their financial assistance will not be eligible to receive financial help in future years.

On the other hand, those taxpayers with coverage from a non-Marketplace source will receive a new form in the mail called a Form 1095-B or a Form 1095-C, describing the coverage they had for the year. This form will be sent by their employer, insurance company, or the government program that provides their coverage, such as Medicare or Medicaid.

Consumers do not need to attach this information to their tax return or wait to receive the form before filling their tax return. If consumers do receive one of these forms, they should keep it in a safe place with their other tax records.

Information and tools are available for individuals who have questions about their tax filing responsibilities under the ACA. These can be found on the Internal Revenue Service and HealthCare.gov websites. The latter also includes tools to help taxpayers understand if they qualify for an exemption and, if they had coverage, the tax credits to which they are eligible based on their income.

TAGS: individuals | compliance | Insurance | tax | tax compliance | law | insurance | insurance tax | tax credits | Internal Revenue Service (IRS) | tax authority | health care | legislation | United States | penalties | individual income tax | Health Insurance | Tax

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