The Tax Preparer and the Affordable Care Act

Very soon, your clients are going to turn to you to for answers about how the Affordable Care Act affects their taxes. There are a few key points that will help you better serve your clients and expand your personal knowledge base.


Individual Share Responsibility Provision:

40 of the 500 provisions in the Affordable Care Act amend or add provision to the U.S. tax code. Most of the 2014 changes have to do with healthcare coverage. The Individual Shared Responsibility provision requires that each person have minimum coverage, qualify for exemption, or make a payment when filing his or her federal tax return.



The Kaiser foundation states that exemptions may be granted for financial hardships, religions objections, people covered by government insurance plans, those without coverage for less than three months, people who make too little to have to pay taxes, those for whom the lowest insurance plan available exceeds 8 percent of their income, and American Indians. If you have clients who fall into any of these categories they may be exempt from the health insurance requirement.



A person qualifies for a subsidy based on his or her income. Subsides are only available if insurance is purchased through the federal exchange system. You may look over your clients’ 2012 tax returns to determine their options based on their income. Families who earn as much as 400% of the federal poverty rate will be eligible for a subsidy.


Employer Responsibilities:

Employers with 50 or more employees are required to offer qualified and affordable health insurance plans for their employees. Failure to comply will result in the employer making an Employer Shared Responsibility Payment in 2015. Those who are self-employed can deduct the cost of their policies.


These are a few key points that may benefit your clients, however it would be wise to continually refresh your knowledge as more information becomes available.