Under the Affordable Care Act, taxpayers will need to provide information about their health insurance coverage when filing their 2014 taxes in 2015, since most uninsured Americans must have health insurance beginning in 2014 or face a tax penalty.
So how can you prove you have health insurance to avoid a tax penalty?
Here’s what you need to know at tax-time:
- When you prepare your taxes you will be asked if you have health insurance. If you already have health insurance there will be a simple check mark on your taxes based on your answer.
- If you have a plan from the Health Insurance Marketplace, the Marketplace will provide Form 1095-A to you and the IRS with information about your coverage and premium tax credits.
- If you purchased health insurance in the Health Insurance Marketplace and received a premium tax credit in 2014, information about your advance premium tax credit will be reported and the actual premium tax credit will be determined on Form 8962.
- If you have job-based coverage, your employer may provide a separate Form 1095-C to you and the IRS with information about your plan and who was covered.
- Private insurers and self-funded plans may provide each policyholder and the IRS with information summarizing the coverage provided on Form 1095-B.
The IRS has provided a transition period for Forms 1095-B and 1095-C, so these forms are not a requirement for tax year 2014.
And lastly, if you think you qualify for an exemption from purchasing health insurance, you may need to provide documentation to substantiate your claim. A few of the exemptions are through your tax return, but a majority require you to apply for an exemption certificate number. TurboTax Health can help you find out if you may be exempt from the tax penalty.
As with all tax laws, TurboTax is up-to-date with the latest tax law changes. If you have more questions about the Affordable Care Act and how it impacts you and your taxes, you can visit TurboTax Health to get answers.