The Impact of the Affordable Care Act for 2015

By Carol Venn

The Affordable Care Act (“Obamacare” or the “ACA”) has a bunch of provisions that are kicking in this year that will definitely affect your tax return.  Please share this information with your friends and colleagues.  There very well may be some ugly surprises for people who are not aware of some of these challenges.

This upcoming year (2015) will be the first year that ALL taxpayers will feel the effects of the Affordable Care Act. That’s because starting with returns that are due on April 15, 2015 (which cover the year 2014) tax returns are now required to report on health insurance coverage status.

This is whether you enrolled in health insurance (or not), and whether you used an ACA plan through the various state and federal marketplaces — or not. It’s for ALL taxpayers.

You are required to show that you have had insurance starting on January 1, 2014 in order to avoid the penalty — and that you were without insurance for less than 3 months during 2014, if you are to avoid penalties.

Future penalties are scheduled to increase, so although for some taxpayers it may seem like a decent tradeoff to just pay the penalty for this year, it becomes increasingly costly to do so in the future.

Second, premium tax credits will be evaluated and adjusted according to information submitted on your tax returns.  This means that if you are:

1.     Currently receiving a tax credit (provided directly to your health insurance provider as payments towards your premium — and offered only to eligible individuals and families without access to employer-sponsored coverage, and who purchase insurance through a marketplace)

2.     Your income or household size has changed since you were granted the credit, then your tax refund or tax obligation may be affected.

If you received this premium tax credit, you will be receiving a form 1095 in the mail. KEEP THESE FORMS. You will need them for the tax return process.

All of the different factors that are coming into play on this year’s tax return are creating a perfect storm to have issues with your tax return if you decide to prepare the return yourself. Contact ASBC if you need a referral for a tax preparation provider in the Cincinnati area.

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