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April 2016  Volume 9, Number 4        
 

The Affordable Care Act and Your Taxes

Because of the Affordable Care Act, you might have received some new forms providing you with information about the health coverage you had or were offered in 2015. If you received individual coverage through the Health Insurance Marketplace or through a health insurer, you should have received a Form 1095-A or Form 1095-B, which provide details about your coverage.

If you had employer-provided health insurance, or if your employer offered you coverage, you should have received Form 1095-C. This provides details about the coverage you were offered (whether you took it or not).

People who qualify for a tax credit to buy individual health insurance through a health insurance exchange have the option of taking it in advance or claiming it when filing their tax return. If you took an advance credit, you might have to repay a portion if your income was higher than expected.

You can qualify for a credit if your income does not exceed 400 percent of the federal poverty limit. The federal poverty level changes each year and depends on the number of people in a family. For 2015 coverage, the federal poverty level was $11,770 for individuals and $24,250 for a family of four in the contiguous 48 states and Washington, DC. Amounts are higher in Alaska and Hawaii.

If you didn’t have coverage in 2015, you’ll pay a penalty with your 2015 tax return, unless you qualify for an exemption. The penalty will equal the higher of these amounts:

  • 2% of household income
  • Maximum: Total yearly premium for the national average price of a Bronze plan sold through the Marketplace
OR
  • $325 per adult
  • $162.50 per child under 18
  • Maximum: $975

If you were covered for part of the year, you’ll pay a pro-rated penalty for any coverage gap exceeding three consecutive months.

 

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In this issue:

This Just In...

Tax-Advantage Your Health Plan with an HSA

Avoiding Medical Identity Theft

Old Life Insurance Policies Could Have Value

The Affordable Care Act and Your Taxes

 


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