When you file your tax return this year, you will notice a big change! This is a result of the Affordable Care Act (ACA), often referred to as Obamacare.
What is Affordable Care Act
Under this act, governments and individuals have a shared responsibility for the availability of health care insurance coverage. The Act created the Marketplace (Exchange) where taxpayers are able to find health care options and obtain help with paying premiums.
How does it impact your tax return?
The Affordable Care Act required that all individuals have health care coverage. This year is the first year taxpayers will be required to pay a fee if they do not have health care coverage or a qualified exemption when they file their tax returns.
What’s included in health care coverage?
Everyone must have qualified health care coverage. This includes:
· Coverage obtained through an employer;
· Government programs (Medicare or Medicaid); or
· Other types of insurance (Marketplace set up by Healthcare.gov).
What qualifies for exemptions?
If you qualify for an exemption, you are not required to pay a fee on your tax return. Exemptions include:
· Short coverage gap (less than 3 months)
· Citizens living abroad
· General hardships
There are many exemptions available. Please visit irs.gov for more information.
What happens if you do not have health care coverage or qualify for an exemption?
If you do not have health care coverage or a qualified exemption you will be required to pay a shared responsibility fee. To determine whether you are required to pay a fee, utilize the Internal Revenue Service (IRS) payment calculation page.
Remember: your choice, your future!
Kemberley Washington is a certified public accountant and professor at Dillard University. She writes a personal finance blog and enjoys helping others get a handle with their finances. Check out her Financial Planner to get your finances in order and under control!