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The most important Affordable Healthcare Act (ACA) tax provision for individuals and families is the premium tax credit. This took effect on January 1, 2014 and will affect federal individual income tax returns filed in 2015.
Individuals who maintain healthcare coverage throughout the year will report their coverage on their federal income tax return by simply checking a box. Qualifying coverage includes most employer-sponsored coverage, coverage obtained through a Health Insurance Marketplace and coverage through most government-sponsored programs, as well as certain other plans.
Those who don’t have qualifying coverage or who don’t have an exemption may have to make an individual shared responsibility payment when they file their federal income tax return. For 2014, the payment amount is the greater of 1 percent of the household income above the taxpayer’s filing threshold, or $95 per adult plus $47.50 per child (limited to a family maximum of $285).
Individuals may qualify for an exemption if they do not have access to affordable coverage, they have a gap of less than three consecutive months without coverage, or if they qualify for one of several other exemptions, including a hardship.
For more tax facts or information about the individual shared responsibility payment, visit IRS.gov/aca. For more information about the Marketplace, visit HealthCare.gov.