By Chuck Bentley
You will need to report your healthcare arrangements to the IRS as one of the consequences of Obamacare, or else: Failure to comply can result in a reduced tax refund and penalties.
First, there’s the coverage issue. Under Obamacare’s individual shared responsibility provision, you must let the IRS know when you file that you had the required minimum essential health care coverage or were exempt. If you have qualified coverage through work, you’ll get a form from your employer or from your insurer.
The Affordable Care Act has a provision called the Premium Tax Credit. This is the government’s way of subsidizing what some folks pay to get their required insurance they obtained through a health care exchange. While some folks got advance payment of this credit when they got coverage, others will claim the tax break when they file their tax returns.
This credit is impacted by any life events and can go up or down: Among the things that could make a tax credit difference are a birth or adoption, marriage or divorce, moving, job change, and increase or decrease in your household income. Either way, you’ll have some calculations to complete on new Form 8962. That information will be reported on Form 1040 or 1040A. You can’t use the short Form 1040EZ if you get this credit.
You can’t bluff the IRS. If you claimed you needed a helping hand to pay for healthcare coverage, you better be right. Form 8962 will be important, because the IRS will look at it to determine if you really deserved to get healthcare at a reduced cost. If you (or anyone in your family) don’t have the required coverage and aren’t exempt, you’ll have to pay a penalty when you file your return. Both exemption claims and penalty calculations are made on new form 8965.
Originally posted 2/10/2015.
Subscribe for Weekly Updates
"*" indicates required fields
Christian Credit Counselors
Is credit card debt causing you stress and strain? Christian Credit Counselors would like to help!