The Affordable Care Act: What’s Trending
When it comes to the health care law – also known as the Affordable Care Act or ACA – and how it may affect your taxes, there are many questions you might have. This page offers news on trending topics and answers to questions we are hearing.
For Your Information…
ACA 2016 Filing Season Statistics – January 2017
IRS Commissioner John Koskinen updated members of Congress on January 9 with results from the 2016 filing season related to Affordable Care Act provisions. See this link for the text of the letter.
IRS Updates and Expands Q&As for Employers
The IRS recently updated and expanded the employer Q&As with more answers to employers’ questions about ACA information reporting requirements and shared responsibility provisions:
- Information Reporting by Employers on Form 1094-C and Form 1095-C
- Employer Shared Responsibility Provisions Under the Affordable Care Act
- Reporting of Offers of Health Insurance Coverage by Employers
It’s Not Too Early to Determine if You Qualify for an Exemption
With the 2017 tax filing season approaching, it’s not too early to think about how the health care law affects your taxes.
If you meet certain criteria for the tax year, you may be exempt from the requirement to have minimum essential coverage. You will not have to make a shared responsibility payment for any month that you are exempt. Instead, you'll file Form 8965, Health Coverage Exemptions, with your federal income tax return. For any month that you do not qualify for a coverage exemption, you will need to have minimum essential coverage or make a shared responsibility payment.
Series of Yes-or-No Questions help you Determine Eligibility for the Premium Tax Credit
The premium tax credit, or PTC, is a refundable credit that helps eligible individuals and families with moderate income afford health insurance purchased through a Health Insurance Marketplace. To get this credit, you must meet certain requirements and file a tax return.
Answer the yes-or-no questions in this chart – or via accessible text – and follow the arrows to find out if you may be eligible for the premium tax credit.
IRS Extends Due Date for Employers and Providers to Issue Health Coverage Forms to Individuals
On November 18, 2016, the IRS extended the 2017 due date for providing 2016 health coverage information forms to individuals. Insurers, self-insuring employers, other coverage providers, and applicable large employers now have until March 2, 2017 to provide Forms 1095-B or 1095-C to individuals, which is a 30-day extension from the original due date of January 31.
Notice 2016-70, also extends transition relief from certain penalties (IRC Sections 6721 and 6722) to providers and employers that can show that they have made good-faith efforts to comply with the information-reporting requirements for 2016 for incorrect or incomplete information reported on the return or statement. This Notice also provides guidance to individuals who, as a result of these extensions, might not receive a Form 1095-B or Form 1095-C by the time they file their 2016 tax returns.is also abating penalties for inadvertent errors and omissions where there was a good-faith effort to comply with the reporting requirements.
The due dates for filing 2016 information returns with the IRS remain unchanged for 2017. The 2017 due dates are February 28 for paper filers and March 31 for electronic filers. This chart can help you understand the upcoming deadlines.
Due to these extensions, individuals may not receive Forms 1095-B or 1095-C by the time they are ready to file their 2016 individual income tax return. While information on these forms may assist in preparing a return, the forms are not required to file. Taxpayers can prepare and file their returns using other information about their health insurance and do not have to wait for Forms 1095-B or 1095-C to file.
People are asking…
Here are commonly-asked questions that we are hearing from taxpayers and seeing on social media.
Q. What happens if I don’t file or I fail to reconcile my advance payments of the premium tax credit when I file my return?
A. Failing to file a tax return or filing your return without reconciling your advance payments will delay your refund and may affect future advance credit payments. The IRS will send you a letter with instructions about what you need to do to resolve this issue, which may include submitting Forms 1095-A and 8962, so we can process your return. If you have not yet filed your return for the 2014 tax year, the Marketplace may discontinue your 2016 advance credit payment. If you do not file and reconcile your return for tax year 2015, the Marketplace may deny your eligibility for advance credit payments in 2017.
Q. Does everyone need to have health insurance coverage?
A. The Affordable Care Act requires you and each member of your family to have basic health coverage (called minimum essential coverage), qualify for an exemption from the requirement to have coverage, or make an individual shared responsibility payment when you file your federal income tax return. If you are not required to file a tax return and don’t want to file a return, you do not need to file a return solely to report your coverage or to claim an exemption.
Q. What are my options to receive help with filing a return and reconciling?
A. 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. For information about filing a return and reconciling advance credit payments, visit IRS.gov/aca.
For more questions and answers about the health care law, see the Affordable Care Act Tax Provisions Questions and Answers page.