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Tax time and the Affordable Care Act: What you need to know

how do you know if you need to file taxes

STATEN ISLAND, N.Y. -- It's the start of tax season and this is the first year that rules involving the Affordable Care Act will have an impact -- to varying degrees -- on how you file.

For many, it will mean a simple check mark; others will be required to include some basic information about their health insurance; some might have to recalculate tax credits, and then some might have to pay a penalty.

The Internal Revenue Service begins accepting returns Tuesday for 2014, and the filing deadline is April 15, 2015, according to the agency's scheduling information website. which includes more detailed information.

The U.S. Department of Health and Human Services says the majority of tax filers -- over three-quarters -- will just need to check a box on their tax returns indicating they had health coverage for all of 2014.

But for those who purchased coverage through the Health Insurance Marketplace. or decided not to enroll in coverage, there are additional steps that will be a part of the tax filing process starting this year, according to a summary of the new requirements posted online by the HHS .


    • Individuals and families with non-marketplace coverage for all of 2014.

Most filers will need to check a box on their tax return to indicate that they had coverage all year. These people met the Minimum Essential Coverage requirement, which means that they had the basic health coverage necessary to meet the Affordable Care Act's standards. These individuals and families will not receive any new forms in the mail and they will not be required to fill out new forms when they file their 2014 income tax returns

Types of health coverage necessary to meet the Affordable Care Act's standards (Minimum Essential Coverage) include:

  1. Most job-based plans, including retiree plans and COBRA coverage
  2. Medicare Part A or Part C
  3. Medicaid
  4. The Children's Health Insurance Program (CHIP)
  5. Most individual health plans you bought outside the Marketplace, including "grandfathered" plans. (Not all plans sold outside the Marketplace qualify as minimum essential coverage.)
  6. If you're under 26, coverage under a parent's plan
    • Individuals and families who had a health plan through the Health Insurance Marketplace in 2014.

Of those who purchased coverage through the Health Insurance Marketplace, most benefitted from a tax credit to lower the cost of their monthly premium, according HHS.

Those taxpayers will need to provide some basic information about their health insurance when they file their taxes. All Marketplace consumers will receive a new statement by early February -- called a Form 1095-A -- that includes all the information they need about their coverage to file their return. (You can also download a copy of your statement through your Marketplace account starting in late January or early February.)

Here are some key tips from the Department of Health and Human Services:

    • Wait for your Form 1095-A to arrive before you file your taxes. If you haven't received a Form 1095-A by early February, you should contact the Marketplace Call Center at 1-800-318-2596. TTY users should call 1-855-889-4325.
    • When you get your Form 1095-A, you should check the information on your form -- such as the number of people in your household -- for accuracy.
    • If you find an error on your Form 1095-A, you should call the Marketplace Call Center at 1-800-318-2596 to find out how to get a corrected form.
    • You should keep your Form 1095-A with your other important tax information, like your W-2.

    • If a tax credit lowered your monthly premiums for health insurance in 2014, you will use your Form 1095-A to input some basic information when you file your taxes.


But for some, the process maybe much more complex because when you signed up for health insurance, you had to estimate your income for 2014. Your estimated income determined the size of your tax credit.

Now, you need to compare your estimated income with your actual income -- and this could impact the final amount of your tax credit.

If your income or household size changed throughout the year, it could impact the final amount of your tax credit.

You may see a smaller refund or owe money back if you underestimated your income.

You may also get a bigger refund if you overestimated you income.

If you did not receive a tax credit to lower your monthly premiums in the Marketplace, you can visit to get information you'll need to see if you qualify.

"If your Marketplace coverage started partway through 2014 and you were uninsured earlier in the year, or if you were uninsured for only a short period of time during the year, you may be eligible for an exemption from the requirement to have health coverage," the HHS states. "You can claim the exemption on your tax return when you file. The process is fast and easy. You'll simply select the exemption that applies to you and enter the corresponding code."


  • Individuals who didn't have health coverage in 2014.

While those who can afford health coverage, but chose not to buy it, may have to pay a fee, individuals who could not afford coverage or met other conditions can receive an exemption.

You can claim most exemptions on your tax return, but some exemptions are only available through the Marketplace.

There are a variety of exemptions available. Here are the most common examples:

  1. The cost of coverage was too expensive. This applies to you if the lowest priced plan available to you would have cost more than 8 percent of your income. Visit to get information you may need to claim the exemption for coverage being unaffordable to you in 2014.
  2. You were uninsured for only a short period of time.
  3. You experienced a hardship, such as if you had medical expenses that resulted in substantial debt, if a close family member passed away, or if you experienced domestic violence, among other hardships. You will need to apply to the Health Insurance Marketplace to qualify for this exemption.

When you file your taxes, you will enter information about the months you had coverage and any exemptions you qualify for on your tax forms.

If you could have afforded coverage in 2014 but chose not to buy it -- and you don't qualify for an exemption -- you will have to pay a fee with your federal tax return.

The fee is based on your income, and how many months you didn't have coverage.

If you didn't have health coverage for all of 2014, you'll pay the higher of $95 per adult and $47.50 per child, who didn't have coverage, limited to a family maximum of $285, or 1% of your income, subject to certain caps.


    • If consumers have questions about their taxes, need to download forms, or want to learn more about the fee for not having insurance, they can find information and resources at or They can also call the Marketplace Call Center at 1-800-318-2596.
    • Some people who signed up for health insurance through the Marketplace can get free tax assistance. For more information, visit or .

Category: Taxes

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