The ACA requires everyone have Minimum Essential Coverage to comply with the law and avoid a Shared Responsibility Payment (also known as tax penalty, fee, or Individual Mandate payment). If a consumer 1) does not qualify for an exemption and 2) fails to have Minimum Essential Coverage, they will have a Shared Responsibility Payment due at tax time for the months the consumer did not have coverage or an exemption.
The IRS announced to tax preparation professionals that they will not reject a tax returns because the tax payer has not indicated whether they had health insurance coverage for 2016. Under the ACA, if a tax payer has not had health insurance for most of 2016, they are subject to the Shared Responsibility Payment also referred to as the Individual Mandate.
Covered California has released a table of sources of income and whether they are countable toward the Modified Adjusted Gross Income (MAGI) for the monthly health insurance subsidy. The foundation for the table is the federal 1040 income tax return. The Countable Sources of Income table includes income for the monthly subsidy and whether the income is considered for MAGI Medi-Cal.
The IRS knows that you want to understand how the health care law may affect you when filing your taxes next year. When questions come up, IRS.gov/aca is a great place for you to begin finding the answers you need – when you need them.
The Internal Revenue Service today issued a consumer alert about possible fake charity scams emerging due to last weekend’s mass-shooting in Orlando, Fla., and encouraged taxpayers to seek out recognized charitable groups.
Whether you’re an employer or an individual taxpayer, the Taxpayer Advocate Service has several tools available to assist you in estimating credits and payments related to the Affordable Care Act. The Taxpayer Advocate Service recently added a tool to help employers understand how the employer shared responsibility provisions apply to their organization.
Employers, insurance companies and others who provide MEC will be required to report who’s covered with them to the IRS. This is called Minimum Essential Coverage Reporting, or IRS Code Section 6055 Reporting, and it will take place each year. This is how the federal government will make sure people have MEC. It’s also how the IRS will determine who may owe a penalty for not having coverage.
If you are a small employer, there is a tax credit that can put money in your pocket. The small business health care tax credit benefits employers. The credit is available to eligible employers for two consecutive taxable years beginning in 2014 or later.
If you or anyone in your household enrolled in a health plan through the Health Insurance Marketplace in 2015, you should have received a Form 1095-A, Health Insurance Marketplace Statement, from the Marketplace. You will use the information on the form to claim the premium tax credit if you’re eligible, to reconcile advance payments of the premium tax credit, or both, when filing your tax return.
Some taxpayers will be receiving an IRS letter about the premium tax credit; this letter is also known as a 12C letter. Be sure to read your letter carefully and respond timely. Here are answers to questions you may have about this letter.