Are you confused about the Affordable Care Act (ACA) “coverage mandate” for this year’s tax season? You’re not alone. Congress’ new tax law removed the ACA penalties for not having health coverage, but the law has created confusion about the status of the mandate for this tax season.
The new tax law will not affect 2017 tax returns, and the penalties will stay in place until 2019. And if you want your return processed—and your refund sent—you’ll need to report information about your health care coverage, according to the Internal Revenue Service (IRS).
Exactly how you tell the IRS about your coverage depends on how you were covered (or not). Here are four things to consider when preparing your tax return:
- Report your health care coverage, or risk processing delays
An income tax refund is like a second Christmas to many. If you’re depending on that money to come in, you’ll need to report your health care coverage, or you could see a delay in your return being processed. - How to report job-provided coverage
If your employer provides you with health care coverage, all you will need to do is check a box on your return, according to the IRS. The box is found on the line labeled “Health care, individual responsibility,” and indicates full year coverage. - How to report marketplace-provided coverage
If you purchased health insurance through HealthCare.gov, you will need to report this using Form 1095-A, Health Insurance Marketplace Statement. This form notes who is covered and the length of coverage. Your insurance provider should mail this form to you so you can file your return correctly. - How to report no health coverage
If a financial situation or other circumstance prevented you from getting health insurance, you may qualify for a hardship exemption. If you qualify for a hardship exemption, you won’t be required to pay a fee for the months you lacked coverage. Find the hardship exemptions and forms here. If you do not qualify for a hardship exemption, or you were able to afford coverage and did not attain it, you are responsible for the individual shared responsibility payment, also known as the mandate or fine. The mandate must be paid for any month that you, your spouse, or dependents didn’t have qualifying coverage. You can use the Individual Shared Responsibility Provision – Payment Estimator from the IRS to estimate your payment.
If you have questions about your tax return and health care reporting, you can contact the IRS at 800-829-1040 or make an appointment at your local taxpayer assistance center. You can find also visit the IRS help page.
Tax season is stressful enough without unexpected delays and penalties. Please spread the word to relatives, friends, and neighbors—especially those who are covered through the marketplace or are uninsured.