This month, the IRS issued a statement saying for the tax year 2017 they will NOT accept electronically filed tax returns where the taxpayer does not address the health coverage requirements of the Affordable Care Act (ACA). Taxpayers will be required to acknowledge that they were either covered, qualified for an exemption, or were not covered.
This requirement may come as a surprise to those who follow news in which the president has stated that the ACA is dead. Contrary to the executive order issued last January, the Affordable Care Act is still law(ACA). Until that changes, here is what you need to do to avoid filing penalties in 2018.
- ACA Open Enrollment for 2018 runs from November 1, 2017 to December 15, 2017. Outside the Open Enrollment Period, you generally can enroll in a health insurance plan only if you qualify for a Special Enrollment Period. You can enroll by clicking here.
- You may be eligible for the premium tax credit if you purchased health coverage through the Health Insurance Marketplace. If you have a life event change, it is important to report this to the Marketplace as it can affect your qualification for the credit. In some cases, you may be required to pay back the credit you received due to life changes such as increased income.
- The individual shared responsibility provision requires you, your spouse, and your dependents to have qualifying health insurance for the entire year, report a health coverage exemption, or make a payment when you file.
- Exemptions from coverage are available in some circumstances, including certain hardships, some life events, health coverage or financial status, and domicile and residency. In 2018, if you qualify for any exemption, you must report the exemption on your Federal tax return. In some cases, you may have to apply for a Marketplace exemption.
- You will not face a penalty if you are uncovered less than three months of the year. You must have coverage in the third of the three months to qualify for this exemption.
- Keep your tax records! Your insurance company, your employer, or the Marketplace will send either forms 1095-A, 1095-B or 1095-C. Your tax preparer will need these documents to prepare your return.
- The Affordable Care Act is also being enforced for employers. Employers with 50 or fewer employees can shop for insurance through the Small Business Health Options Program (SHOP). Employers with 25 or fewer employees may qualify for a Small Business Health Care Tax Credit to help cover premiums.
The IRS will continue to review any new legislation. To stay updated with how any changes may affect you, you can visit https://www.irs.gov/affordable-care-act , or get in touch with BNC Tax!
Christie DuChateau, BNC Tax & Accounting, rev. 10/26/17