Your Money Matters: Affordable Care Act and taxes

Your Money Matters
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Cliff Morgan
Strategic Wealth Management

Cliff's Information:

If you are like most people, you probably already have qualifying health care coverage and don’t need to do anything more than continue your insurance.  Most taxpayers will simply need to check the box on the 1040 tax return to indicate they had health coverage (and what it was) for all of 2014.

If you don’t have or maintain coverage, you will have to get an exemption or make a payment with your federal income tax return.  If you are eligible for an exemption, you will claim or report coverage exemptions on Form 8965, Health Coverage Exemptions, and attach it to Form 1040 Form 1040A, or Form 1040EZ.
You may be exempt if you have no affordable coverage options because the minimum amount you must pay for the annual premiums is more than 8% of your household income; have a gap in coverage for less than three consecutive months; or have a hardship that prevents you from obtaining coverage.  On, you can find a comprehensive list of the coverage exemptions, and you can get additional information about exemptions on the Individual Shared Responsibility Provision web page on, or

An individual/family who already purchased health care through enrollment in the ACA Marketplace will use Form 8962 if you receive the 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 you purchased coverage through the Health Insurance Marketplace, you should receive Form 1095-A, Health Insurance Marketplace Statement, which will help complete Form 8962.
If you have not signed up yet, you should find out more about the Premium Tax Credit and if you are eligible for it. For example, you may be eligible if your income is within certain limits, and you buy health insurance through the Marketplace

For any month that you or your dependents do not have coverage or qualify for an exemption, you will have to make a shared responsibility payment
Use the worksheet in the Form 8965 Instructions to calculate the shared responsibility payment. For 2014, generally, the payment amount is the greater of 1% of your household income above your filing threshold or $95 per adult ($47.50 per child) limited to a family maximum of $285. You will make your Individual Shared Responsibility payment when you file your income tax return.

Things have changed if you are a business owner. It is incumbent upon you that you work closely with your tax preparer to make sure he/she is up to date with the latest requirements for business owners.
Whether you have just two employees, or over 50 - the rules and regulations for employers are intricate and complicated, and there are penalties for those who do not correctly comply. So -  in fact  (if possible) it is advisable to consult with a tax attorney who can shed light on the Department of Labor regulations, and who is familiar with things such as IRS notice 2013-54 which deals with Employer Healthcare Arrangements under section 105 like HRA and FSA plans.  Because the ACA is being regulated by multiple entities including the IRS, Health and Human Services, and the Department of Labor, it is possible that you would be complying with one, but violating regulations of another.


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