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Affordable Care Act Tax Provisions for Individuals and Families

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Reconcile Advance Credit Payments of the Premium Tax Credit

You must file a tax return to reconcile any advance credit payments you received in 2014 and to maintain your eligibility for future premium assistance. If you do not file, you will not be eligible for advance payments of the premium tax credit in 2016. 

 

The IRS is currently sending Letter 5591 to taxpayers who received 2014 advance payments, but have not yet filed their tax return, to remind them of the importance of filing their 2014 federal tax return along with Form 8962, Premium Tax Credit.  The letter encourages taxpayers to file within 30 days of the date of the letter to substantially increase their chances of avoiding a gap in receiving assistance with paying Marketplace health insurance coverage in 2016. For more information, see Understanding Your Letter 5591.

The Affordable Care Act includes the individual shared responsibility provision and the premium tax credit that may affect your tax return. The individual shared responsibility provision requires you, your spouse, and your dependents to have qualifying health insurance for the entire year, report a health coverage exemption, or make a payment when you file.  In addition, you may be eligible for the premium tax credit if you purchased health coverage through the Health Insurance Marketplace.

Reporting Coverage
 
  Claiming Coverage Exemptions
 

Most taxpayers already have qualifying health care coverage, and will simply check a box on their tax return.

 

Some taxpayers are exempt from the requirement to have coverage and will not need to make a shared responsibility payment.

Claiming and Reconciling Premium Tax Credit
 
  Making the Individual Shared Responsibility Payment
 

If you purchased coverage through the Marketplace, you may be eligible for the premium tax credit.

 

If you do not have qualifying coverage or an exemption for each month of the year, you will need to make a payment with your return.

You can use our Interactive Tax Assistance tool to find out if you are eligible for a health coverage exemption, if you must make a payment with your return or if you may be eligible for the premium tax credit. Remember, that filing electronically is the easiest way to file a complete and accurate tax return as the software guides you through the filing process. Electronic filing options include: free Volunteer Assistance, IRS Free File, commercial software, and professional assistance.

Page Last Reviewed or Updated: 30-Jul-2015