The Internal Revenue Service offers an assortment of online services, including features that help taxpayers understand how the Affordable Care Act will affect them at tax time.

Q:       Will the Affordable Care Act impact my tax return?
A:        This year’s tax return will include new questions to include provisions of the Affordable Care Act (ACA). Most taxpayers (about three-fourths) will just check a box to verify that they have health insurance coverage, but some taxpayers will have to take some additional steps. Visit IRS.gov/aca to learn about the premium tax credit, the individual shared responsibility requirement and other tax features of the ACA. The individual shared responsibility requirement included in the Affordable Care Act is new to the Form 1040 this filing season.

Q:       What does the ACA require taxpayers to do?

A:        The Affordable Care Act requires that all taxpayers and each member of their families have qualifying health insurance coverage for each month of the year, or qualify for an exemption or make an individual shared responsibility payment when filing the federal income tax return. Some moderate-income taxpayers may also qualify for financial assistance to help cover the cost of health insurance purchased through the Health Insurance Marketplace. Taxpayers will fall into one or more of the following categories:

·       Check the box. Most taxpayers will simply check a box on their tax return to show that each member of their family had qualifying health coverage for the whole year. No further action is required. Qualifying health insurance coverage includes coverage under most, but not all, types of health care coverage plans. Taxpayers can use the chart on IRS.gov/aca to find out if their insurance counts as qualifying coverage. 

·       Exemptions. Taxpayers may be eligible to claim an exemption from the requirement to have coverage.  Eligible taxpayers need to complete the new IRS Form 8965, Health Coverage Exemptions, and attach it to their tax return.  Taxpayers must apply for some exemptions through the Health Insurance Marketplace. However, most of the exemptions can be obtained from the IRS when filing a return.

·       Individual Shared Responsibility Payment. Taxpayers who do not have qualifying coverage or an exemption for each month of the year will need to make an individual shared responsibility payment with their return. Examples and information about figuring the payment are available on the IRS Calculating the Payment page.

·       Premium Tax Credit.  Taxpayers who bought coverage through the Health Insurance Marketplace should receive Form 1095-A, Health Insurance Marketplace Statement, from the Marketplace by early February. This form should be saved because it has important tax information. Taxpayers who should receive the form but haven’t received it by early February should contact their Marketplace. The IRS does not have access to this information.

           
            Taxpayers who got advance payments of the premium tax credit must file a federal income tax return. These taxpayers need to reconcile their advance payments with the amount of premium tax credit they’re entitled to based on their actual income. Some may see a smaller or larger tax refund or tax liability than was expected. Use IRS Form 8962, Premium Tax Credit (PTC), to calculate the premium tax credit and reconcile the credit with any advance payments.

            The IRS has set up a special section at IRS.gov/aca with more information about the Affordable Care Act and the 2014 income tax return.

Q:       Can taxpayers receive help in meeting the health care requirement?
A:        Low- and moderate-income taxpayers can get help meeting this health care requirement and filing their return for free by visiting one of the more than 12,000 community-based tax help sites staffed by more than 90,000 volunteers that participate in the Volunteer Income Tax Assistance and Tax Counseling for the Elderly (VITA/TCE) programs. To find the nearest site, use the VITA/TCE Site Locator on IRS.gov.

            The IRS also reminds taxpayers that a trusted tax professional can also provide helpful information about the health care law. A number of tips about selecting a preparer and national tax professional groups is available on IRS.gov.

The information for this “Law You Can Use” column was provided by the Internal Revenue Service. It was prepared by the Ohio State Bar Association. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.