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Your Health Coverage Tax Filing Requirements

This tax filing season, a new box that taxpayers will need to check is for their health insurance status. That is how most taxpayers will be reporting their healthcare status to the government. However, those that bought coverage through the Marketplace and those that are exempt from getting coverage will need to fill out forms to report this information to the IRS.

health coverage tax credit

The IRS will charge penalties for taxpayers who are not covered or do not qualify for an exemption. The penalty for not being insured, as shared by the government healthcare department for 2014, is:

  •  1% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,000 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.
  •  $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.

You will need to pay the higher of these two amounts.

BIS Courier Herald shares facts that every tax filer should know about the Affordable Care Act tax filing requirements:

“Most tax filers – over three quarters – will just need to check a box on their tax return to indicate that they had coverage all year. These people met the Minimum Essential Coverage requirement, which means that they had the basic health coverage necessary to meet the Affordable Care Act’s standards. These individuals and families will not receive any new forms in the mail and they will not be required to fill out new forms when they file their 2014 income tax returns.

“What consumers need to know:

  • When you file your tax return, you’ll need to check a box to indicate that you and your family had health insurance for all of 2014. Types of health coverage necessary to meet the Affordable Care Act’s standards (Minimum Essential Coverage) include:
    • Most job-based plans, including retiree plans and COBRA coverage
    • Medicare Part A or Part C
    • Medicaid
    • The Children’s Health Insurance Program (CHIP)
    • Most individual health plans you bought outside the Marketplace, including ‘grandfathered’ plans. (Not all plans sold outside the Marketplace qualify as minimum essential coverage.)
    • If you’re under 26, coverage under a parent’s plan
    • It’s important to note that filing electronically is the easiest way to file a complete and accurate tax return. Last year, approximately 85 percent of taxpayers e-filed. Electronic Filing options include free Volunteer Assistance, IRS Free File and professional assistance.

    “Resources available to help:

  • Learn more about taxes if you had 2014 health coverage from another source
  • IRS Resource Guide: Health Care Law: What’s New for Individuals & Families

“Individuals and families who had a health plan through the Health Insurance Marketplace in 2014.

“Last year millions of people purchased quality, affordable coverage through the Health Insurance Marketplace, and most benefitted from a tax credit to lower the cost of their monthly premium. Now that tax season is here, individuals and families enrolled in a health plan through the Marketplace will need to provide some basic information about their health insurance when they file their taxes. All Marketplace consumers will receive a new statement – called a Form 1095-A – that includes all the information they need about their coverage to file their return.

“What consumers need to know:

    • You will receive Form 1095-A in the mail from the Marketplace by early February. In most states, you can also download a copy of your statement through your Marketplace account starting in late January or early February.
      • It’s very important to wait for your Form 1095-A to arrive before you file your taxes. If you haven’t received a Form 1095-A by early February, you should contact the Marketplace Call Center at 1-800-318-2596. TTY users should call 1-855-889-4325.
      • When you get your Form 1095-A, you should check the information on your form

– such as the number of people in your household – for accuracy.

    • If you find an error on your Form 1095-A, you should call the Marketplace Call Center at 1-800-318-2596 to find out how to get a corrected form.
    • You should keep your Form 1095-A with your other important tax information, like your W-2.”