Archive for January, 2015

The Health Care Law – Preparing to File Your 2014 Tax Return

Thursday, January 22nd, 2015

The exclusive purpose for the information which is provided from this website is to disseminate information, and not to provide tax advice. 

Beginning in tax year 2014 there is a new reporting and certification requirement that is required to be reported when you file your Federal tax return.  This new requirement is associated with the provisions of the  ”Affordable Care Act (ACA)”.  In a nutshell, all individual taxpayers must now have health care insurance coverage.  If you did not have health care coverage in the prior calendar year you will need to complete Federal Form 8965, “Health Coverage Exemptions” (http://www.irs.gov/pub/irs-pdf/f8965.pdf ).  The instructions for completing the form are provided at the IRS website (http://www.irs.gov/pub/irs-pdf/i8965.pdf ) .  This is a standard tax form and should be included with your off-the-shelf tax return preparation software.

To summarize, all individuals (includes your family) can be grouped in to one of three categories for determining your reporting requirements:

1.    You had health care insurance coverage (also referred to as “minimum essential coverage”) throughout the entire tax year, or

2.     You have a health care coverage EXEMPTION, or

3.    You do NOT meet the requires for either #1 or #2 above and must make a “shared responsibility” payment with your tax return.

Health care coverage exemptions are usually provided  (granted) from the Marketplace (also referred to as health care exchanges).   You may also complete Form 8965 to claim this exemption.  Use this same form if for any month in the tax year either you or any member of your family (“tax household”) had neither “minimum essential coverage” or a health care coverage exemption.  From the “General Instructions” for Form 8965:

“Some coverage exemptions are available only from the Marketplace, others are available only by claiming them on your tax return, and others are available from the Marketplace or by claiming them on your tax return. If you or another member of your tax household was granted a coverage exemption from the Marketplace, complete Part I of Form 8965.  If you or another member of your tax household is claiming a coverage exemption on your tax return, complete Part II or Part III of Form 8965.   Depending on your situation, you may need to complete one or more parts of the form.

These instructions also provide the information you will need to calculate your shared responsibility payment if, for any month, you or another member of your tax household did not have qualifying health care coverage (referred to as “minimum essential coverage”) or a coverage exemption. Use the Shared Responsibility Payment Worksheet, later, to figure your payment, if any.   You will report any payment amount on your tax return (Form 1040, line 61; Form 1040A, line 38; or Form 1040EZ, line 11).”   (more…)