Your clients’ health coverage through the Health Insurance Marketplace may affect their taxes:
- If anyone in your household enrolled in a health plan through the Marketplace in 2014, you’ll need some new information when you file your federal income taxes.
- If you didn’t have health coverage for 3 or more months in 2014, you can apply for an exemption or you might have to pay a fee.
TIP #1: Clients should watch their mail for Form 1095-A.
If your client enrolled in a health plan through the Marketplace, they will receive Form 1095-A in the mail from the Marketplace by early February. They should keep this form with your other important tax information, like their W-2 and other tax records. Let them know that they will not get this form if they have health coverage through Medicaid, Medicare, or the Children’s Health Insurance Program (CHIP).
Form 1095-A includes:
- Information about anyone in their household who enrolled in a health plan through the Marketplace for 2014.
- Information about the monthly premiums they paid to their health plan.
- Information about a “benchmark” premium used to compute their premium tax credit.
- The amount of any advance payments of the premium tax credit that were paid to their health plan on their behalf for 2014 — these payments might have helped them lower what they paid for their monthly premiums.
They may receive more than one Form 1095-A if anyone in their household switched plans in 2014 or reported life changes (like getting married or having a baby) after their coverage began. It also might happen if they had more than one policy covering people in their household during 2014. They will get a Form 1095-A even if you only had Marketplace coverage for part of 2014.
When they get the Form 1095-A in the mail from the Marketplace, they should make sure the information matches their records. Check things like the start and end dates of their coverage and the number of people in their household. If they think information on their Form 1095-A is incorrect, visit HealthCare.gov/taxes/ to find out how to get a corrected Form 1095-A.
They also can download and print a copy of their Form 1095-A from their Marketplace account on HealthCare.gov. Click on “Log In” at the top of the home page to access their Marketplace account.
TIP #2: Their final premium tax credit for 2014 will be computed with their federal income tax return.
When they applied for health coverage through the Marketplace, they provided information on their application about their income and family size. The Marketplace used this and other information to determine the amount of premium tax credit they were eligible to get. If they were like most people who qualified, they probably used “advance payments” of this premium tax credit at the time they enrolled in a health plan, to lower what their paid for monthly premiums. If so, the final or actual amount of their premium tax credit will be computed when they file their federal income tax return.
If the amount they used during the year is less than the actual premium tax credit they are eligible for, they will get the difference as a credit on their tax return. If the advance payments they used are more than the actual amount of their credit, they may need to pay the difference with their tax return.
If they did not get any help to lower the amount they paid for their health plan premiums during 2014, they might still qualify for a premium tax credit when they file their taxes. Use Form 8962 from the IRS to find out if they qualify for a premium tax credit and compute the amount to report on their tax return.
TIP #3: If your client didn’t have health coverage for part of 2014, use Form 8965.
If your client’s Marketplace coverage started partway through 2014 and they were uninsured earlier in the year, you’ll need to fill out Form 8965 from the IRS when you file their taxes. This will show you if they qualify for an exemption from paying a fee for the months they didn’t have coverage.