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Your 2015 individual income tax return may need to include new documentation to meet the requirements of the Affordable Care Act (ACA). For the first time, Taxpayers may need to file the new forms with their 2015 federal income tax returns or keep the information with their tax records.
This requirement is part of the ACA mandate that all Americans have “minimum essential coverage” under the federal health insurance law. If you do not have the minimum required coverage, you will need to prove you qualify for an exemption or pay a shared responsibility payment when you file your tax return.
What’s new for the filing of 2015 individual federal income tax returns is that qualifying taxpayers should be receiving the new tax information Forms 1095-A, 1095-B, or 1095-C. Taxpayers who may qualify for a premium tax credit should wait to receive a Form 1095-A before filing their tax return. Other taxpayers who are not seeking a credit are not required to submit the forms they may receive, but should keep the records on hand in case they need to verify their health insurance coverage if audited.
Businesses, the Marketplace (which is government managed) and employers who are providing health coverage plans or options to employees bear the responsibility of completing and sending new forms.
Form 1095-A
The new Form 1095-A is called the Health Insurance Marketplace Statement. Taxpayers who are enrolled in coverage through the Marketplace must file a tax return using Form 1095-A if they qualify for a premium tax credit and reimbursement of any advance payments made in 2015. This new form is created and sent from the Marketplace and should be sent by mail to qualifying taxpayers by early February.
It is possible that a taxpayer’s household will receive more than one Form 1095-A. This may happen if more than one policy covers people in the same household, if any household member switched plans in 2015, or had a life change after their coverage began (such as getting married or the addition or deletion of a dependent). Make certain the dates reflected on the form(s) include the correct start and end dates of coverage as well as the correct number of people in the household.
Form 1095-B
The new Form 1095-B is a form that is compiled and sent from health care insurance providers to individuals documenting the nature and duration of coverage. Though for the first time providers are required to send these forms, the forms are not yet required to be included with a federal income tax return. Taxpayers are urged not to wait to receive this new form before filing their return, but rather to file on time and then keep the Form 1095-B with their tax records should the documentation be needed later.
As with 2014 individual federal tax returns, other documents may be used to prove a taxpayer has the minimum essential health insurance coverage. Among statements that may prove a taxpayer and/or a member of the taxpayer’s family has health care coverage are:
- Insurance cards
- Explanation of benefits
- Statements from an insurer
- W-2 reflecting health insurance deductions
- Payroll statement reflecting health insurance deductions
Form 1095-C
The new Form 1095-C is a form that is compiled and sent by employers who provide health insurance and coverage to certain employees. The form includes details about the type of coverage, the insured who were covered and for how long. This form can be used to determine whether a person qualifies for a premium tax credit, and to prove whether an employer offered that person and/or family members “self-insured coverage”.
For now, you should wait for one of these new forms to arrive before preparing and filing your tax return only if you wish to receive a tax credit. For more information on gathering your health insurance coverage documentation, click here.
If you need more information, please contact one of our tax preparation experts at McRuer CPAs.
