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Wondering about reporting your health care on your tax return?

Recent news reports highlight the likely repeal of the Affordable Care Act (ACA; i.e., “Obamacare”) with the inauguration of President Trump. Whatever changes occur will likely not affect your need to report your health care coverage on your 2016 tax return.

The IRS provided an easy-to-understand If/Then chart for reference:

IF YOU…

Are a U.S. citizen or a non-U.S. citizen living in the United States

THEN YOU…

Must have qualifying health care coverage, qualify for a health coverage exemption, or make a payment when you file your income tax return.


IF YOU…

Had coverage or an employer offered coverage to you in the previous year

THEN YOU…

Will receive one or more of the following forms;

This information will help you complete your tax return.


IF YOU…

Received health coverage through an employer or under a government program – such as Medicare, Medicaid and coverage for veterans – for the entire year

THEN YOU…

Just check the full-year coverage box on your Form 1040 series return and don’t need to read further.


IF YOU…

Did not have coverage for any month of the year

THEN YOU…

Should check the instructions to Form 8965, Health Coverage Exemptions, to see if you are eligible for an exemption.


IF YOU…

Were eligible for an exemption from coverage for a month

THEN YOU…

Must claim the exemption or report an exemption already obtained from the Marketplace by completing Form 8965, Health Coverage Exemptions, and submitting it with your tax return.


IF YOU…

Did not have coverage and were not eligible for an exemption from coverage for any month of the year

THEN YOU…

Are responsible for making an individual shared responsibility payment when you file your return.


IF YOU…

Are responsible for making an individual shared responsibility payment

THEN YOU…

Will report it on your tax return and make the payment with your income taxes.


IF YOU…

Need qualifying health care coverage for the current year

THEN YOU…

Can visit HealthCare.gov to find out about the dates of open and special enrollment periods for purchasing qualified health coverage.


IF YOU…

Enroll in health insurance through the Marketplace for yourself or someone else on your tax return.

THEN YOU…

Might be eligible for the premium tax credit.


IF YOU…

Received the benefit of more advance payments of the premium tax credit than the amount of credit for which you qualify on your tax return

THEN YOU…

Will repay the amount in excess of the credit you are allowed subject to a repayment cap.


IF YOU…

Did not enroll in health insurance from the Marketplace for yourself or anyone else on your tax return

THEN YOU…

Cannot claim the premium tax credit.


IF YOU…

Are eligible for the premium tax credit

THEN YOU…

Can choose when you enroll in coverage to get premium assistance sent to your insurer each month to lower your monthly payments or get all the benefit of the credit when you claim it on your tax return.


IF YOU…

Are claiming the premium tax credit and did not benefit from advance payments of the premium tax credit

THEN YOU…

Must file a tax return and IRS Form 8962, Premium Tax Credit (PTC) and claim the credit on the line labeled – Net premium tax credit.


IF YOU…

Choose to get premium assistance when you enroll in Marketplace coverage

THEN YOU…

Will have payments sent on your behalf – to your insurance provider. These payments are called advance payments of the premium tax credit.


IF YOU…

Get the benefit of advance payments of the premium tax credit and experience a significant life change, such as a change in income or marital status

THEN YOU…

Should report these changes in circumstances to your Marketplace when they happen.


IF YOU…

Get the benefit of advance payments of the premium tax credit

THEN YOU…

Will report the payments on your tax return and reconcile the amount of the payments with the amount of credit for which you are eligible.


 

We can only wait to see what will happen in 2017, and you can trust the experienced tax team at Patrick & Robinson CPAs to stay current on the developments that will affect you.

We’re here to help! Contact us at: Office@CPAsite.com or 904-396-5400.

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