As if tax forms weren’t complicated enough, here come two new forms concerning the new Affordable Care Act (ACA), popularly known as Obamacare. Form 8962 (Premium Tax Credit) and Form 1095-A (Health Insurance Marketplace Statement).
- This form determines if you are subject to the Obamacare penalty if you failed to have an approved health insurance policy in 2014.
- If you received a monthly subsidy used to reduce your health insurance premium—formally known as an Advanced Premium Tax Credit (APTC), Form 8962 will be used to determine if the Advanced Tax Credit you received in 2014 was too high or too low. Remember how you had to estimate your income for 2014 so that your subsidy amount could be determined? Now it all gets trued up. If you underestimated your income, you’ll owe money to the IRS because your subsidy was too high. If you overestimated your income, the IRS will send money to you in the form of a Premium Tax Credit.
- Form 8962 will also be used to determine the amount of Premium Tax Credit for those individuals who chose to skip receiving the advanced portion of the tax credit and opted, instead, to wait and receive 100% of the tax credit on their tax return. (These individuals avoided the frequent meltdowns and headaches associated with the dreaded PEAK Medicaid application and avoided many Connect for Health application problems that were recently documented on 9 News.)
The key documentation needed to complete Form 8962 in all of the above scenarios is contained in the new IRS Form 1095-A which will contain information regarding a person’s health insurance status and any financial assistance they may have received from Connect for Health Colorado.
Q. Who will receive form 1095-A?
Only those who bought their insurance through our state Exchange—Connect for Health Colorado–will receive this form. Everyone else will not receive a 1095 form until 2016.
Q. What information is contained on Form 1095-A?
- How many months you had health insurance in a plan sold through Connect for Health Colorado.
- How much you paid in monthly premiums.
- How much financial assistance in the form of the Advance Premium Tax Credit, APTC, (also referred to as the “subsidy” amount) was paid to your health insurance company on your behalf—if any.
- Who in your family was enrolled in a health plan in 2014—this will be your proof that you purchased insurance in 2014 and that you are not subject to the Obamacare penalty for failing to have insurance.
Be sure to keep Form 1095-A safe and show it to your tax preparer as the information on this form is needed to file Form 8962.
Q. How will receipt of the Financial Assistance subsidy to lower insurance payments affect your Tax Filing?
- If you qualified for financial assistance, you MUST file a tax return and it MUST be a joint return if you are married.
- You will no longer be able to file any short form, such as Form 1040-EZ. Instead, you will have to file the form 1040 or 1040-A.
- You will need to file Form 8965 with your income tax return.
Q. When will I receive my Form 1095-A?
Connect for Health will mail this form out by January 31st, so you should be getting it in early February.
Q. What is I lose my Form 1095-A?
You might be able to obtain a copy by logging into your Connect for Health Account and going to “My Documents” from where you may be able to print out a copy of your lost Form 1095-A. If that does not work, call Connect for Health at 855-752-6749.
Q. Why did I receive multiple copies of Form 1095-A?
- Form 1095-A is sent to each head of household for each plan the individual(s) in the household are enrolled in. This means you may receive multiple 1095-A forms if you changed plans in the middle of the year, if you added or removed members from the policy during the year, or if different individuals in your household are enrolled in different plans. Be sure to retain all of these forms to use when filing your federal income tax return.
- You may also receive multiple 1095-A forms due to corrections. In this case, you should use the most recent form. Corrected forms will have a “Corrected” box checked at the top of the form.
Q. What if I find an error in the Form 1095-A?
If you feel there is a mistake on the Form 1095-A immediately call Connect for Health at 855-752-6749. They may be able to send out a corrected form to you.
Q. I have technical questions or need tax advice. Where can I get help?
Your tax preparer will be your best source of information. If you do not have a tax preparer you can call H&R Block, Jackson Hewlett Tax Service, or Liberty Tax Service. If you want to do your own research try the IRS website at the following link: www.irs.gov/uac/affordable-care-act-tax-provisions-home.
Because of a huge increase in reporting requirements due to the new healthcare law, I expect that tax preparers will be more swamped than usual. I would strongly recommend that you set up an appointment with a tax preparer as soon as possible.
The preceding information was based on Connect for Health training material provided to brokers.