One of the fun new realities of the Affordable Care Act is that you now will need to include health insurance information in your personal taxes.
Why Health Insurance Is Reported on Your Taxes
Most people receive subsidies from the government to help pay their health insurance costs. These subsidies are based on several factors including your location, age, household size and household income. They are technically called “premium tax credits.”
When applying for health insurance at the beginning of the year, you are asked to estimate your income in order to determine your eligibility for premium tax credits and to determine the amount you receive.
Theoretically, when you file for your taxes for that year, there will be a reconciliation between your estimated income and your actual income.
The difference between the amount of subsidy you received (based on your estimated income) and what you should have received (based on your actual income) will result in an adjustment to your refund (or what you owe). If you should have received more subsidy, the difference is added to your refund; if you received too much, the difference is deducted from your refund.
How to Report Health Insurance on Your Taxes
You should receive IRS Form 1095-A from your state Exchange by January 31st. In South Carolina, Georgia, and most of the states we serve, this will come from the Federal Marketplace (since there is no state exchange).
This form will list who in the household has health insurance policies and how much each person received in monthly subsidies. You will then use that form to fill out Form 8962, which asks for details on insurance, subsidies and income.
If you don’t have health insurance for the entire year, you will have to break down subsidy payments by month. (That sounds exciting, doesn’t it?)
Please remember we are not and have never claimed to be tax professionals! If you have someone else help you with your taxes, that person will be able to answer additional questions for you.
If you still need to get ACA-compliant health insurance we can certainly help you with that. You can use our simple system to determine your eligibility for premium tax credits, to get prices, and to enroll in a plan. It takes 5 minutes.
[button url=”https://acforrest.com/obamacare-open-enrollment/”]Access Our Obamacare Enrollment System Here[/button]