Health Care Reform and Your Taxes

Health Care

Lately you may be hearing buzz about health care reform, Affordable Care Act, or Obamacare on the news.

These are the unofficial names for The Patient Protection and Affordable Care Act, a national health care plan signed into law by President Obama that aims to provide the majority of Americans with access to affordable health care.

Not sure what this new health care law is or if it changes anything for you and your family?  Don’t worry, TurboTax has you covered.

Here are the facts straight from our experts.

  • The Affordable Care Act requires that all Americans (with a few exceptions) have health insurance starting in 2014.
  • If you have health insurance, you’re all set.  80% of Americans already have health insurance through their employer, Medicaid, Medicare, or individual insurance and are already in compliance with the new law.  If you fall into this bucket, you don’t need to do anything.  You’re all set.
  • If you’re uninsured, you can shop for health insurance in the online Health Insurance Marketplace.  The Marketplace, which opens October 1, 2013, helps you compare your health insurance coverage options and costs.  You have until March 31, 2014 to purchase health insurance through the marketplace.  If you choose not to, you could face a health care tax penalty on your 2014 tax return (the one you file in 2015).
  • You may be eligible for financial assistance to help cover insurance cost.  If you purchase your health insurance through the online health insurance marketplace or exchange, you may be eligible for a government subsidy in the form of a tax credit.  Unlike most tax credits, you will not have to wait to receive the tax credit or subsidy; it will be applied to your insurance in 2014 when your coverage begins.
  • When it comes to the new health care law, TurboTax has you covered.  The requirement to purchase health insurance does NOT impact your 2013 tax return (the one you file in 2014).  TurboTax is up to date with all the latest tax and health care laws so you can be confident that your taxes are done right with TurboTax. 

Still have questions about how the new health care law impacts you and your family? TurboTax AnswerXchange will give you answers to your personal healthcare questions.

Just answer a few simple questions and it will tell you how the new law impacts you and whether you’re eligible for financial assistance, so that you can make the best choice for your health care needs and budget.

To find out more about the Affordable Care Act, or Obamacare,  you can also watch our video.

Comments (981) Leave your comment

  1. I am married and covered by insurance at work. My husband has no income and does not have insurance. If he gets the so-called affordable care, does my income count as his?

  2. If I have medical insurance but I do not have dental insurance (pediatric dental) will I be subject to a penalty when I file my taxes for not having pediatric dental?


  3. My employer only pays 50% of the group premium. In lieu of a salary increase they want to add the additional 50% to my gross wages and then deduct it pre tax to pay my share. What are the advantages to me rather than them just paying the 100% and not run it thru my payroll check.

    1. Hi Helen,
      It sounds to me as though your employer currently pays 50% of your premium and you pay the remaining 50% as a payroll deduction. So if you are making $500/week and your share of the premium is $25/week, you have all your payroll taxes withheld on $500, and then the $25 premium is deducted. If your employer wants to add the additional 50% as wages and then deduct pre-tax, your gross wages will be $525, your premium will be deducted, then your payroll taxes withheld will still be based on $500 wages. Under your current plan, if the taxes are $50, you would take home $425. Under the new plan, you would take home $450.

      Thank you,
      Mary Ellen

  4. Hi Turbo TaxLisa,
    Is the amount that I receive from the tax credit subsidy considered Taxable Income in the state of PA.?
    Thank you,

      1. I have posted numerous questions over the last couple of months to which I have received no answers. I have no idea whether the folks at TurboTax monitor this blog or not. If so, then they are just very picky about what they want to answer.

  5. We receive the affordable health care tax credit for low income earners. If we file our taxes late what effect will this have on us receiving the tax credit?

    1. Hi Gideon,
      If you receive an advance premium tax credit or are eligible to claim the tax credit on your taxes that you received in 2014 on your 2015 taxes then you would have to file your taxes. In addition, anyone that has a tax filing requirement for example income over $10,000 if single and $20,000 if married filing jointly has to file their taxes in order to receive the credit.
      Thank you,
      Lisa Greene-Lewis

  6. If you receive a tax credit that pays for your health ins each month under obamacare does that mean I will no longer receive my tax return ?

    1. Janice,
      When you prepare your 2014 tax return next year, you will calculate the exact amount of subsidy you are entitled to. If the subsidy you actually applied to your premiums is more than the subsidy calculated, the difference can reduce your refund. If your calculated subsidy is more than you received, you will increase your refund.

  7. For tax year 2014, if I am self employed and purchase a policy through the marketplace paying 100% of the premium, can I deducted the premium as an expense on my taxes in 2014? Currently in 2013 if I am paying 100% of my premiums and show a profit, these premiums are deductible to reduce my income. I can not find anything that answers this question for me.

    1. Hi Michelle,
      The Self-employed health insurance deduction is still available. If you receive a subsidy from the marketplace, you will need to reduce your deduction by the amount of the subsidy.

  8. My only income is from social security disability but I have only been on it for one year and can’t get medicare until I have been on ssd for two years . The ssd is not taxable income .I make $1200a month on ssd and can’t afford to pay the premium on the healthcare and still pay my bills and utilities .the healthcare marketplace said I could not get a tax credit discount ,I make just over the limit for medicaid in my state of tn.This affordble healthcare is not affordable at all.

  9. Hello,
    My wife and I now receive medical benefits under the affordable care act. My question is that we cannot file tax returns “married filing jointly”, and must file “married filing separately” due to the fact that my refund is always kept by the federal government due to a large legal debt that I incurred long before our marriage. Does the ACA demand that we file jointly in CA, or can we still file “married filing separately” without losing the medical benefits? I am not concerned with paying higher taxes, but I am very concerned about affecting my wife financially. I don’t want to file an innocent spouse claim after the fact, as I just don’t want to effect her with this.

    1. File 8379 Injured spouse with your federal tax return and you can file together and it wont affect her portion at all.

  10. My husband and I are at about 300% poverty level. I m not insured, my husband will start medicare from june. Our adult son is unemployed, files his own tax return, and is depended on us, and is covered under medicaid. If we include him as dependent on our tax return, will he loose his medicaid coverage ? And if we include him in our tax return, it will bring our income below 250%, will i be eligble for medicaid or any other subsidy ? Thank you.

  11. I make $32,000 a year. After taxes it figures out to about $1900 a month. By the time I pay rent, food, car insurance, water, electric, gas heat, gas car…. I barely have $250 left over. How am I supposed to pay $325 a month for insurance, what happens if my car breaks down. I’m being asked to pay over 15% of my take home pay for insurance, that has a hefty $2500 I have to pay before the insurance actually starts paying for anything. Thats all add’s up to nearly 25% of my take home pay. How is this considered Affordable? I see who its affordable for, not me thats for sure. I suppose Obama wants me to eat Ramen for breakfast lunch dinner. Tell the truth Lisa, or are you afraid to tell people the real truth and the real math.

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