Health insurance and the 2015 tax season: Part 1

If you had health insurance in 2014, learn what to expect when filing your income taxes for the year.

Health coverage now affects consumer taxes. The Affordable Care Act states that every person in the United States must have minimum health coverage in 2014 and beyond, or must pay a fee on their federal tax return. This fee is sometimes called the “individual shared responsibility payment.”  In some cases, you may be able to get an exemption from the fee and you would not have to pay it. New information from the Internal Revenue Service (IRS) Tax Facts states what to expect when filing for 2014, along with Frequently Asked Questions.

Employer or Non-Marketplace Coverage affects more than 75 percent of taxpayers. This includes those with Medicare, Medicaid, Healthy Michigan Plan, CHIP, TRICARE, VA health coverage and if you received an Exemption (see my Mar. 25, 2014 article). If you had this type of coverage for every month of 2014 for yourself, your spouse (if filing jointly) and anyone you claim as a dependent, you will simply check a box on your tax return on Line 61.

Marketplace Coverage: If you had coverage through a Marketplace Health Plan in 2014, you will receive a new Form 1095-A in the mail from the Marketplace. The letter will be postmarked by February 2, 2015. Starting in mid-January, you can download a copy of your Form 1095-A from your Healthcare.gov account under “Messages.” The form will include all members of a tax household who enrolled in a plan, whether or not they received financial assistance, or only had Marketplace coverage for part of 2014. You will use Form 1095-A to complete Form 8962, and only submit Form 8962 to the IRS as part of your tax return.

You will use the information on Form 1095-A to reconcile your Advance Premium Tax Credits (APTC). If your APTC was less than the PTC on your Form 8962, your refund will increase by the difference or the amount of taxes you owe will be lowered. If your APTC was greater, your refund will either be smaller or you may have a balance due.

You could claim Premium Tax Credits (PTC) for the first time, based on your actual household income and family size as reported on the tax return. You can get the PTC even if you did not apply for financial assistance when you submitted your Marketplace application, as long as you complete Form 8962 and meet eligibility criteria determined by the IRS.

If you think there are errors on your Form 1095-A, you can request a review to determine if a correction is necessary. Visit HealthCare.gov, or call the Health Insurance Marketplace call center at 1-800‑318-2596. TTY users should call 1-855-889-4325. You can find local application assisters at localhelp.healthcare.gov or Enroll Michigan.

Many people who signed up for Marketplace coverage can get free assistance with filling out their taxes at a local VITA – Volunteer Income Tax Assistance or AARP-Tax Aide site.

For more answers to your questions about health insurance, go to healthcare.gov Q&A or the Health Insurance FAQs - eXtension. Michigan State University Extension is providing education about health insurance basics this year, including the why, what and how for making a smart decision. Find out about Smart Choice: Health Insurance workshops and factual information at the Affordable Care Act Roadmap .

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