Wednesday, January 14, 2015

Obamacare and My Tax Return: What Do I Need to File?

The time has come to file your 2014 U.S. income tax return and you need to know what you need for the Obamacare (The Affordable Care Act) filing requirements.

In many cases it will be simple.

  • If you had the required coverage you simply check the box on your tax return (1040 line 61) and you are done. 
  • If you are not required to file a tax return you will not need to file to claim an exemption.  Here is the quote from the IRS: 
"No. If you are not required to file a federal income tax return for a year because your gross income is below your return filing threshold, you are automatically exempt from the shared responsibility provision for that year and do not need to take any further action to secure an exemption. If you are not required to file a tax return for a year but file one anyway, you will be able to claim the exemption on your tax return."

  • If you are a dependent on someone else's tax return you should not have any reporting requirement for Obamacare (The Affordable Care Act).

Premium Tax Credit:
To receive or if you received the Premium Tax Credit you will need to file form 8962 which will calculate your credit and reconcile it with what you received.  You should receive a form 1095-A that will help you complete form 8962.

Exemptions or Shared Responsibility Payment:
You will need to file form 8965 to claim an exemption and this form is also used to calculate the amount of your Shared Responsibility Payment (the penalty).

  • If you have a "Marketplace Granted Coverage Exemption" you will need the Exemption Certificate Number.  
  • For IRS exemptions you simply complete the form 8965.  Here is the quote from the IRS:  
For a coverage exemption that you qualify to claim on your tax return, all you need to do is file Form 8965 with your tax return – you do not need to call the IRS or obtain the exemption in advance.
Click here for a post including the exemptions from Obamacare (The Affordable Care Act).

Please note that tax preparers have yet to begin filing tax returns and the above information is the latest available as of today (January 14, 2015).  Once we begin filing returns and actually use these forms I may have some updates for you.  For example, the instructions for the form 8965 are currently available only in draft form.  When they are finalized things could change.  

The CPA Superhero wants to help you to succeed in business, life, and in retirement.  While my main business is preparing tax returns, I also work with clients to setup accounting systems to start, manage and develop their business(es) and develop and implement a financial plan. Contact me using my information below to schedule a free introductory consultation up to a half hour. 

Jeff Haywood, CPA

The CPA Superhero

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My posts contain general information that does not fit every situation, they are not all inclusive, and as always for your tax situation everything "depends on facts and circumstances."  In addition, the information/IRS requirements are always subject to change.  So call me to talk about your specific facts and circumstances and what you want to accomplish.