affordable care act (aca) - tax aid · reporting changes in circumstances examples: •family size...
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![Page 1: Affordable Care Act (ACA) - Tax Aid · Reporting Changes in Circumstances Examples: •Family size or filing status (family = personal exemptions) •Increase/decrease in household](https://reader036.vdocuments.mx/reader036/viewer/2022071021/5fd5b28fd01942596b7c5bce/html5/thumbnails/1.jpg)
Affordable Care Act (ACA)
Presented by Francis Sameon
www.tax-aid.orgRevised 1/14/16
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Tax-Aid Disclaimer
• This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer’s own legal and financial advisors.
• Additional information about tax law can be found on www.IRS.gov
www.tax-aid.org revised 1/14/16
2
This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer's own legal and financial advisors. Additional information about tax law can be found on www.irs.gov.
![Page 3: Affordable Care Act (ACA) - Tax Aid · Reporting Changes in Circumstances Examples: •Family size or filing status (family = personal exemptions) •Increase/decrease in household](https://reader036.vdocuments.mx/reader036/viewer/2022071021/5fd5b28fd01942596b7c5bce/html5/thumbnails/3.jpg)
Agenda
• Background
• Individual shared responsibility provision
• Premium tax credit
www.tax-aid.org revised 1/14/16 3
This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer's own legal and financial advisors. Additional information about tax law can be found on www.irs.gov.
![Page 4: Affordable Care Act (ACA) - Tax Aid · Reporting Changes in Circumstances Examples: •Family size or filing status (family = personal exemptions) •Increase/decrease in household](https://reader036.vdocuments.mx/reader036/viewer/2022071021/5fd5b28fd01942596b7c5bce/html5/thumbnails/4.jpg)
Individual Shared Responsibility
Report Health Care coverage Claim Exemption coverage Make shared responsibility payment
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Reporting Coverage
Check box and leave entry space blank if everyone on the return had coverage for the full year
www.tax-aid.org revised 1/14/16
5
This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer's own legal and financial advisors. Additional information about tax law can be found on www.irs.gov.
![Page 6: Affordable Care Act (ACA) - Tax Aid · Reporting Changes in Circumstances Examples: •Family size or filing status (family = personal exemptions) •Increase/decrease in household](https://reader036.vdocuments.mx/reader036/viewer/2022071021/5fd5b28fd01942596b7c5bce/html5/thumbnails/6.jpg)
Information Statements
•Marketplace - Form 1095-A, Health Insurance Marketplace Statement
•Insurers - Form 1095-B, Health Coverage
•Large Employers – Form 1095-C, Employer-Provided Health Insurance Coverage and Offer
www.tax-aid.org revised 1/14/16
6
This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer's own legal and financial advisors. Additional information about tax law can be found on www.irs.gov.
![Page 7: Affordable Care Act (ACA) - Tax Aid · Reporting Changes in Circumstances Examples: •Family size or filing status (family = personal exemptions) •Increase/decrease in household](https://reader036.vdocuments.mx/reader036/viewer/2022071021/5fd5b28fd01942596b7c5bce/html5/thumbnails/7.jpg)
Coverage Exemptions
• Coverage Exemptions only available at filing
•Coverage Exemptions only available through the Marketplace
•Coverage Exemptions from Marketplace or IRS
• Submit form 8965 with federal return to claim coverage
www.tax-aid.org revised 1/14/16 7
This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer's own legal and financial advisors. Additional information about tax law can be found on www.irs.gov.
![Page 8: Affordable Care Act (ACA) - Tax Aid · Reporting Changes in Circumstances Examples: •Family size or filing status (family = personal exemptions) •Increase/decrease in household](https://reader036.vdocuments.mx/reader036/viewer/2022071021/5fd5b28fd01942596b7c5bce/html5/thumbnails/8.jpg)
2015 Coverage Exemptions
www.tax-aid.org revised 1/14/16
8This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer's own legal and financial advisors. Additional information about tax law can be found on www.irs.gov.
![Page 9: Affordable Care Act (ACA) - Tax Aid · Reporting Changes in Circumstances Examples: •Family size or filing status (family = personal exemptions) •Increase/decrease in household](https://reader036.vdocuments.mx/reader036/viewer/2022071021/5fd5b28fd01942596b7c5bce/html5/thumbnails/9.jpg)
How is the 2015 Payment Calculated?
• For the year, based on the greater of the calculated:
– percentage of income (2%) or
–flat dollar amount ($325 per adult)
•Limited to maximum of $975 per household
• Prorated for months without coverage/exemption
• Cannot exceed the national average premium for bronze level health plans
www.tax-aid.org revised 1/14/16
9
This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer's own legal and financial advisors. Additional information about tax law can be found on www.irs.gov.
![Page 10: Affordable Care Act (ACA) - Tax Aid · Reporting Changes in Circumstances Examples: •Family size or filing status (family = personal exemptions) •Increase/decrease in household](https://reader036.vdocuments.mx/reader036/viewer/2022071021/5fd5b28fd01942596b7c5bce/html5/thumbnails/10.jpg)
2015: What You Need to Know
• Forms 1095-A, B and C
• Apply for Marketplace exemptions early
• ISRP amounts increase
• 2016 Marketplace enrollment
–Nov 1, 2015 to January 31, 2016
–Special Enrollment Periods
www.tax-aid.org revised 1/14/16 10
This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer's own legal and financial advisors. Additional information about tax law can be found on www.irs.gov.
![Page 11: Affordable Care Act (ACA) - Tax Aid · Reporting Changes in Circumstances Examples: •Family size or filing status (family = personal exemptions) •Increase/decrease in household](https://reader036.vdocuments.mx/reader036/viewer/2022071021/5fd5b28fd01942596b7c5bce/html5/thumbnails/11.jpg)
Return Preparer Interview Best Practices
• Use Form 1095-A, B or C to
–verify coverage months and
–who is covered
• Determine eligibility for exemption
–Marketplace ECN
–Income below return filing threshold or
–IRS coverage exemptions
www.tax-aid.org revised 1/14/16
11
This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer's own legal and financial advisors. Additional information about tax law can be found on www.irs.gov.
![Page 12: Affordable Care Act (ACA) - Tax Aid · Reporting Changes in Circumstances Examples: •Family size or filing status (family = personal exemptions) •Increase/decrease in household](https://reader036.vdocuments.mx/reader036/viewer/2022071021/5fd5b28fd01942596b7c5bce/html5/thumbnails/12.jpg)
Agenda
• Background
• Individual shared responsibility provision
• Premium tax credit
www.tax-aid.org revised 1/14/16 12
This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer's own legal and financial advisors. Additional information about tax law can be found on www.irs.gov.
![Page 13: Affordable Care Act (ACA) - Tax Aid · Reporting Changes in Circumstances Examples: •Family size or filing status (family = personal exemptions) •Increase/decrease in household](https://reader036.vdocuments.mx/reader036/viewer/2022071021/5fd5b28fd01942596b7c5bce/html5/thumbnails/13.jpg)
Basics of the Premium Tax Credit (PTC)
• Refundable tax credit
• Must buy Marketplace coverage
• Must file Form 8962 to claim the PTC and reconcile any advance payments
www.tax-aid.org revised 1/14/16
13
This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer's own legal and financial advisors. Additional information about tax law can be found on www.irs.gov.
![Page 14: Affordable Care Act (ACA) - Tax Aid · Reporting Changes in Circumstances Examples: •Family size or filing status (family = personal exemptions) •Increase/decrease in household](https://reader036.vdocuments.mx/reader036/viewer/2022071021/5fd5b28fd01942596b7c5bce/html5/thumbnails/14.jpg)
PTC Eligibility
• Must meet all of the following requirements:
• Income between 100-400% of Federal Poverty Line
• Taxpayer, spouse, or dependent must enroll in Marketplace coverage for a month that the enrollee is not eligible for coverage through employer or government plan
• Cannot be claimed as a dependent by another person
• Not file as Married Filing Separately
• Note: Some exceptions apply
www.tax-aid.org revised 1/14/16
14
This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer's own legal and financial advisors. Additional information about tax law can be found on www.irs.gov.
![Page 15: Affordable Care Act (ACA) - Tax Aid · Reporting Changes in Circumstances Examples: •Family size or filing status (family = personal exemptions) •Increase/decrease in household](https://reader036.vdocuments.mx/reader036/viewer/2022071021/5fd5b28fd01942596b7c5bce/html5/thumbnails/15.jpg)
Advance Payments of PTC (APTC)
• Determined by Marketplace based on estimated household income and family size
• Paid directly to insurance company on the taxpayer’s behalf
• MUST file tax return to reconcile
www.tax-aid.org revised 1/14/16
15
This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer's own legal and financial advisors. Additional information about tax law can be found on www.irs.gov.
![Page 16: Affordable Care Act (ACA) - Tax Aid · Reporting Changes in Circumstances Examples: •Family size or filing status (family = personal exemptions) •Increase/decrease in household](https://reader036.vdocuments.mx/reader036/viewer/2022071021/5fd5b28fd01942596b7c5bce/html5/thumbnails/16.jpg)
Reporting Changes in Circumstances
Examples:
• Family size or filing status (family = personal exemptions)
• Increase/decrease in household income
• Gain/loss of health care coverage or eligibility
• Moving to another address
Important: Report changes to the Marketplace when they happen
www.tax-aid.org revised 1/14/16
16
This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer's own legal and financial advisors. Additional information about tax law can be found on www.irs.gov.
![Page 17: Affordable Care Act (ACA) - Tax Aid · Reporting Changes in Circumstances Examples: •Family size or filing status (family = personal exemptions) •Increase/decrease in household](https://reader036.vdocuments.mx/reader036/viewer/2022071021/5fd5b28fd01942596b7c5bce/html5/thumbnails/17.jpg)
How to claim the PTC
• Based on actual annual household income and family size reported on the tax return
• Claimed on tax return using Form 8962
–Reconciles APTC
–Results in either a refundable credit or repayment of excess advance payments
www.tax-aid.org revised 1/14/16
17
This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer's own legal and financial advisors. Additional information about tax law can be found on www.irs.gov.
![Page 18: Affordable Care Act (ACA) - Tax Aid · Reporting Changes in Circumstances Examples: •Family size or filing status (family = personal exemptions) •Increase/decrease in household](https://reader036.vdocuments.mx/reader036/viewer/2022071021/5fd5b28fd01942596b7c5bce/html5/thumbnails/18.jpg)
Forms needed to claim PTC
• Form 1095-A from Marketplace
• Form 8962 to claim and reconcile PTC/APTC
• File Form 8962 with 1040, 1040A or 1040NR
www.tax-aid.org revised 1/14/16
18
This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer's own legal and financial advisors. Additional information about tax law can be found on www.irs.gov.
![Page 19: Affordable Care Act (ACA) - Tax Aid · Reporting Changes in Circumstances Examples: •Family size or filing status (family = personal exemptions) •Increase/decrease in household](https://reader036.vdocuments.mx/reader036/viewer/2022071021/5fd5b28fd01942596b7c5bce/html5/thumbnails/19.jpg)
Return Preparer PTC Interview Best Practices
• Did your client receive Form 1095-A from Marketplace? • APTC
• Verify coverage months and who is covered
• Multiple policies issued
• Were there changes in circumstances during the year? • Married/divorced
• Eligible for government or employer sponsored coverage
• Months without coverage
www.tax-aid.org revised 1/14/16
19
This summary provides basic information regarding basic tax law. Nothing in this summary supplants or replaces the requirements of the tax code. This summary is not intended as a substitute for advice from a taxpayer's own legal and financial advisors. Additional information about tax law can be found on www.irs.gov.