The Affordable Care Act (ACA) and Form 1095
The Affordable Care Act has created reporting complexities for individuals and businesses. All American’s are required to have health insurance. Individuals how are not covered by insurance may be subject to penalties. Penalties for failure to have health insurance are assessed on individual income tax returns (Form 1040). In order to confirm whether someone is insured the IRS has created Form 1095-A, Form 105-B and Form 1096-C. During the 2014 tax filing season taxpayers will begin to see these forms for the first time. Each form service a different purpose. It is likely that a taxpayer will only receive one per year. But some taxpayers may receive multiple forms depending on specific circumstances. Below you will find detail of what each of these forms mean for you and if and when you should expect to receive one.
Form 1095 – A
Form 1095 – A is designed for taxpayers who purchased their health insurance through the HealthCare.gov . This form will not be mailed to those who purchased insurance through the Marketplace. The form will be posted to their Healthcare.gov accounting during filing season. As of January 2015 it is still not clear when taxpayers will be able to access this report. This report will be necessary in order to complete your income tax return for 2014.
Included on Form 1095 – A will be all of your dependents who are insured under the plan. The form will also detail out which months each individual was covered through the Marketplace. The Form will also report the total amount of health insurance premiums paid to the insurance company. This Form 1095 – A will also be used to recalculate what your subsidy should have been. Any adjustment to the subsidy will be reflected on your income tax return.
Those individuals tax have an adjustment to their subsidy will then have to log into their HealthCare.gov account and update information so that their subsidy can be adjusted for the current year.
Form 1095 – A has created complexities for taxpayer’s who previously had less complicated income tax returns. It is recommended that individuals consult professionals.
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