Beginning in 2014, you’ll start seeing some changes to your taxes if you purchase your healthcare coverage at a health insurance Exchange. This won’t affect your taxes if you are already covered by your employer, Medicare, or Medicaid.
2014 is the first year the health care reform law requires you to have health insurance coverage. Most individuals who do not have health insurance will owe a penalty, to be collected by the IRS via your tax return. The penalty starts at $95 in 2014 and increases to $325 in 2015 and to $695 per person by 2016.
On the bright side, individuals who purchase insurance through a health insurance Exchange will be eligible for a tax credit claimed on their 2014 taxes. In order to receive the tax credit for purchasing health insurance from an exchange, you must file a 2014 tax return.
People who have insurance provided by their employer may see that information reported on their W-2 in box 12. If your 2012 W-2 includes this information, don’t worry. This is for reporting purposes only and does not impact your taxes.
Health insurance exchanges and employers will report information about health insurance coverage to the IRS, so you won’t have to worry about it. In 2014, this reporting requirement will help the IRS figure out if you are eligible for the tax credit in 2014.
You can be sure that TurboTax will be up-to-date with all these healthcare law changes. We’ll let you know what you need to do in the future to help you keep more of your hard earned money.
And if you have questions, call us and an experienced TurboTax tax pro will answer your questions and help you get started on your return. Only TurboTax lets you talk to CPAs, enrolled agents and tax attorneys while you prepare your return, free.
Have specific questions about how this impacts you? Ask them below or get health care reform answers in our TurboTax community.