Affordable Care Act (ACA) Tax Provisions
The Affordable Care Act, or health care law, contains health insurance coverage and financial assistance options for individuals and families. The IRS administers the tax provisions included in the law. Use the Affordable Care Act and Taxes - At a Glance charts to better understand the health care law and how it affects you and how it affects your tax return. See What's Trending for news on trending topics and answers to questions we are hearing.. Visit HealthCare.gov for more information on coverage options and financial assistance.
What do I need to know about the health care law?
The Individual Shared Responsibility Provision requires you and each member of your family to have qualifying health insurance (called minimum essential coverage), have an exemption, or make a shared responsibility payment when you file your federal income tax return. If you get your insurance coverage through the Health Insurance Marketplace, you may be eligible for a Premium Tax Credit. Filing electronically is the easiest way to file a complete and accurate tax return. Electronic Filing options include free Volunteer Assistance, IRS Free File, commercial software andprofessional assistance.
- Health Care Law: What’s New for Individuals & Families
- 3 Tips About Marketplace Coverage and Your Taxes
- No Health Coverage? What That Means for Your Taxes
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The health care law contains many tax and other provisions for employers. The IRS administers the tax provisions included in the law. Visit HealthCare.gov andSBA.gov/healthcare for more information on other provisions.
The Affordable Care Act, or health care law, contains benefits and responsibilities for employers. The size and structure of your workforce – small, large, or part of a group – helps determine what applies to you. However, if you have no employees, the following information does not apply to you
How do I know if I am a small or large employer? Why does it matter?
An employer’s size is determined by the number of its employees. Employer benefits, opportunities and requirements are dependent upon the employer’s size and the applicable rules.
Small Employers - Small employers, generally those with fewer than 50 full-time employees, may be eligible for credits and other benefits. Learn more…
Large Employers - A large employer has 50 or more full-time employees or equivalents. Learn more…
- Fewer than 25 full-time equivalent employees may be eligible for a Small Business Health Care Tax Credit to help cover the cost of providing coverage.
- Generally 50 or fewer employees may be eligible to buy coverage through the Small Business Health Options Program (SHOP). Learn more at HealthCare.gov
- 50 or more full-time equivalent employees will need to file an annual information return reportingwhether and what health insurance they offered employees. In addition, they are subject to the Employer Shared Responsibility provisions.
Certain affiliated employers with common ownership or part of a controlled group must aggregate their employees to determine their workforce size. Proposed regulations (pdf) and FAQs provide more information about determining the size of your workforce.
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Here is information about the new forms and updates to the existing forms:
Form 8965, Health Coverage Exemptions
- Complete this form to report a Marketplace-granted coverage exemption or claim an IRS-granted coverage exemption on the return.
- Use the worksheet in the Form 8965 Instructions to calculate the shared responsibility payment.
Form 8962, Premium Tax Credit
- Complete this form to reconcile advance payments of the premium tax credit, and to claim this credit on the tax return.
- Additionally, if individuals purchased coverage through the Health Insurance Marketplace, they should receive Form 1095-A, Health Insurance Marketplace Statement, which will help complete Form 8962.
- Line 46: Enter advance payments of the premium tax credit that must be repaid
- Line 61: Report health coverage and enter individual shared responsibility payment
- Line 69: If eligible, claim net premium tax credit, which is the excess of allowed premium tax credit over advance credit payments
- Line 29: Enter advance payments of the premium tax credit that must be repaid
- Line 38: Report health coverage and enter individual shared responsibility payment
- Line 45: If eligible, claim net premium tax credit, which is the excess of allowed premium tax credit over advance credit payments
- Line 11: Report health coverage and enter individual shared responsibility payment
- Form 1040EZ cannot be used to report advance payments or to claim the premium tax credit