Notable Tax Law Changes
The Affordable Care Act (Obamacare) became law on March 23, 2010 and its tax effects will be felt in years to come. There are many new forms and documentation requirements. Under the individual shared responsibility provision, you must let the IRS know when you file that you (and your family) had the required minimum essential health care coverage or were exempt. If you have qualified coverage, you’ll get a Form 1095-C from your employer or a Form 1095-B from the insurer. In these cases, you’ll simply check a box on your tax return. If you or anyone in your family doesn’t have the required coverage (or aren’t exempt), you will have to pay a penalty when you file your tax return.
For those taxpayers that obtain their required insurance through a health care exchange, the premium tax credit could be available. This is the government’s way of subsidizing health insurance for certain people. Some taxpayers got advance payments on this credit when they obtained the coverage. Others will claim the tax break when they file their current year tax returns. Either way, calculations will be required on Form 8962. A Form 1095-A will be received if health insurance was obtained through a government sponsored health exchange.