Utah APA State Conference

Transcription

1 Utah APA State Conference

2 Disclaimer The information contained in this presentation is current as of April 6, For the latest information about tax provisions of the Affordable Care Act, visit IRS.gov/aca. 2

3 The Health Care Law and Taxes for Individuals and Families

4 Individual Shared Responsibility Report Health Care Coverage Claim Exemption from Coverage Make Shared Responsibility Payment

5 Reporting Coverage Check box and leave entry space blank if everyone on the return had coverage for the full year

6 Minimum Essential Coverage Offered by an employer, COBRA and retiree coverage Purchased through private insurance or Health Insurance Marketplace Provided by government-sponsored programs, including veteran s coverage, CHIP and most Medicare and Medicaid

7 Information Statements Marketplace - Form 1095-A, Health Insurance Marketplace Statement Insurers - Form 1095-B, Health Coverage Large Employers Form 1095-C, Employer-Provided Health Insurance Coverage and Offer

8 Form 8965 Health Coverage Exemptions Claim most exemptions at time of filing Report Marketplace granted exemptions

9 Making an Individual Shared Responsibility Payment Taxpayers will owe an ISRP for anyone on the return who did not have: MEC for every month of the year or Coverage exemption for any month without MEC Use Form 8965, Health Coverage Exemptions, worksheet to calculate ISRP

10 ISRP Common Errors Eligible for coverage exemption - did not claim Income below filing threshold Not lawfully present Coverage gap Miscalculated SRP SRP on dependent returns

11 Health Insurance Marketplace Provides information at HealthCare.gov or state Marketplace website Enrolls individuals in health coverage Offers financial assistance Issues Form 1095-A, Health Insurance Marketplace Statement

12 Premium Tax Credit Refundable tax credit Buy Marketplace coverage Have Form 1095-A from Marketplace to file File Form 8962 to reconcile any advance payments and claim the PTC

13 PTC Eligibility Must meet all of the following requirements: Income between % of Federal Poverty Line Taxpayer, spouse, or dependent must enroll in Marketplace coverage for a month that the enrollee is not eligible for coverage through employer or government plan Cannot be claimed as a dependent by another person Not file as Married Filing Separately

14 Advance Payments of PTC (APTC) Determined by Marketplace based on estimated household income and family size Paid directly to insurance company on the taxpayer s behalf MUST file tax return with Form 8962 to reconcile

15 Premium Tax Credit Letters for TY C Letter requests information to reconcile Advance Payments of the Premium Tax Credit File to protect 2017 APTC 5858 Letter to extension filers with 2015 APTC 5862 Letter to taxpayers with 2015 APTC

16 Report Changes in Circumstances to Marketplace Report to the Marketplace when they happen Examples of changes include: Family size or filing status Increase/decrease in household income Gain/loss of health care coverage or eligibility Moving to another address

17 How to Reconcile Advance Payments or Claim PTC Based on actual annual household income and family size reported on the tax return Claimed on tax return using Form 8962 Need Form 1095-A from Marketplace Reconciles APTC Results in either a refundable credit or repayment of excess advance payments

18 Form 8962 Premium Tax Credit File Form 8962 with tax return to : claim the premium tax credit and reconcile APTC

19 PTC Common Errors Did not reconcile APTC Claimed PTC but failed to attach Form 8962 Form 1095-A data not correctly reported Transposed digits Miscalculated Monthly PTC Allowed Miscalculated Repayment Amount of Excess APTC

20 Employer Shared Responsibility Provisions

21 What Employers Need to Know Fewer than 50 full-time employees (including fulltime equivalent employees) 4980H does not apply Applicable Large Employer (ALE) status Employer tax provisions for ALEs: Employer Shared Responsibility Provisions ( 4980H) Information Reporting ( 6056) Employers that offer self-insured plans: Information Reporting ( 6055) 21

22 Employer Shared Responsibility Provisions ALEs must Offer health coverage to their full-time (FT) employees (and their dependents), or Potentially be subject to an employer shared responsibility payment 22

23 Determining ALE Status Number of employees and their hours of service in preceding year determines ALE status for the current year Definition of full-time employee Definition of full-time equivalent employee Seasonal worker exception Common ownership and controlled groups Transition rule for 2015 ALE determination 23

24 Common Owner ALE For all of 2015 & 2016, Corp A owns 100% of Corp B and Corp C Number of 2015 FT employees: Corp A None Corp B 40 Corp C Total 100 Corp A + B + C is an ALE for 2016 Corps B & C are each an ALE member 24

25 Defining a Full-Time Employee FT = 30 hrs/week or 130 hrs/month Two measurement methods Monthly Look-back Defining an hour of service Hour for which paid or entitled to be paid Special rules 25

26 ESRP Liability Liability exists if employer: Does not offer coverage to at least 95% of FT employees (and their dependents) and at least one FT employee receives the PTC OR Does offer to 95% of FT employees (and their dependents), but at least one FT employee receives the PTC because, for that full-time employee, coverage was not offered unaffordable, or did not provide minimum value 26

27 Definition of Affordability and Affordability Minimum Value Affordable if employee s share of lowest cost self-only coverage does not exceed 9.56% (as adjusted) of household income Three employer safe harbors Minimum value Covers at least 60% total cost of benefits 27

28 Employer Shared Responsibility Payment Offer to less than 95% Payment of 1/12 of $2,080 per FT employee, above 30 threshold (per month) Offer to at least 95% Payment of 1/12 of $3,120 per PTC-receiving FT employee, (per month), subject to limitation 28

29 ESRP Assessment and Payment Employer will not make a payment with a return IRS will determine amount and notify employer Employer will have opportunity to respond before assessment IRS will send a notice and demand after assessment 29

30 Information Reporting Requirements for ALEs Requires ALEs to file an information return to report health care coverage offered to the employer s fulltime employees for the calendar year Applies to employers who are subject to the employer shared responsibility provisions ( 4980H) Information is used to (1) administer the employer shared responsibility provisions ( 4980H) and (2) determine an employee s eligibility for the premium tax credit 30

31 Due Dates Timely and accurate information returns must be filed by the due dates for 2016 information returns January 31, 2017 to recipients February 28, 2017, to IRS if filed on paper March 31, 2017, to IRS if filed electronically

32 IRS Affordable Care Act Resources IRS.gov/aca IRS.gov/TaxPros Publication 974 Premium Tax Credit Instructions for all Form AIR Homepage 6056 Information Reporting Overview 32