The Patient Protection & Affordable Care Act
Health insurance reporting requirements on the 2014 tax return are bit complicated. If you and your family were covered by an employer health care plan for all 12 months in 2014, there is no need for further clarification. Your return will be processed by simply checking the box to affirm that you had coverage all year.
If you had any months without medical insurance or obtained your insurance through a state or federal health insurance exchange, please read this important information:
Taxpayers not covered for health insurance for a portion of 2014
You will need to report each month without coverage for each applicable family member (taxpayer, spouse and dependents) on the tax return. A penalty of up to 1% of adjusted gross income may apply. However, there are many exemptions to the penalty. We will be sure to review your situation when we prepare your tax return to ensure that you don’t pay a penalty if it can be legally avoided.
Taxpayers covered for health insurance through a state or federal exchange
If you purchased your health insurance through a state or federal plan, your monthly premium payments may have been reduced by a premium subsidy credit. This amount was estimated based upon the income you declared on your insurance application. Your 2014 tax return will be used to validate the premium credit you received. If your 2014 income is less than what was reported on your insurance application, you may receive an additional credit which will increase the refund on your tax return. However, if your 2014 income is higher than what was reported, you may need to pay back a portion of the credit which may result in a balance due on your tax return.
This month you should receive Form1095-A from the exchange, showing the premium credit, if applicable, and additional information. Please be sure to include this form with your tax documents so we can correctly handle the reporting on your tax return.
As always, we are here to support you. Feel free to call us with any questions you may have.