Did you receive assistance this year for healthcare? If you did, you’re among the millions of individuals who got financial help for health insurance last year under President Obama’s law.
For the first time, Americans will experience the rather complex connections between the health care law and their taxes. Tax Alternatives of Nashville wants you to be aware of the new forms that will be arriving in your mailbox! Called 1095-A, the forms come filled out with information from HealthCare.gov or Tennessee’s insurance exchange. They list who in each household got subsidized coverage, and how much the government paid each month to help with premiums.
You don’t actually file the form with your tax return, but you can’t complete your return without the information it contains.
Taxpayers, or prepares like Tax Alternatives, will use the financial details to fill out yet another form — 8962. That one is used to determine whether people received the right amount of assistance that they were legally entitled to. The amount of the tax credit is based on a formula that takes into account income, household size, and health insurance costs in your community.
People who got too much of a subsidy will get their tax refunds reduced by the IRS. For example, you can get dinged if your income went up during the year, and you didn’t realize you had to report that to HealthCare.gov or your state insurance exchange. If you received less of a subsidy than you were entitled to, the IRS will owe you instead.
Here are some pointers for taxpayers:
— You may get more than one 1095-A. That could happen for any number of reasons, from having a baby to switching plans during the year. You need to keep all of them for filing your taxes.
— Contact HealthCare.gov or your state insurance exchange if you believe there is a mistake on your 1095-A. Minor issues such as misspellings should not cause big problems, but it may take some effort to resolve financial inaccuracies.
— If you got employer coverage part way through last year and were only in the insurance exchange for a few months, you will still need your 1095-A to account for the subsidies that you got.
— If you’re used to filing Form 1040EZ, you can’t do that any longer if you got subsidized health care. You’ll have to file one of the longer forms instead.
If you have any questions, as always, contact Tax Alternatives at 615-742-1099. Sign up for a FREE 30-minute sit down HERE with any of our tax professionals and make sure you don’t run the risk of getting audited this year!
