The 2016 tax season is upon us, and one of the biggest changes to your tax filing requirement is the implementation of the Affordable Care Act (ACA). This bill was signed in March 2010 with the intention of making healthcare more affordable and accessible for taxpayers.
The ACA created Health Insurance Marketplace, where individuals needing healthcare coverage can compare and purchase a healthcare insurance policy.
The marketplace also provides an Advanced Premium Tax Credit to qualified taxpayers to offset monthly out-of-pocket costs.
Now that the 2016 tax season is upon us, it is time to reconcile those credits and ensure that each taxpayer required to carry insurance coverage has done so.
The insurance companies will be sending each taxpayer a Form 1095 (which is similar to a W2 or 1099 in that it is reported to the IRS). This form is to ensure coverage, and reconcile any advances of the Premium Tax Credit. Any taxpayer who has chosen not obtain coverage will be assessed with an “Individual Responsibility Payment.”
