VITA Training. Affordable Care Act (ACA)

Transcription

1 VITA Training Affordable Care Act (ACA)

2 Does everyone really have to get health insurance? Yes. A new health care law says that health insurance will be required starting January 1, That means everyone must get or have health insurance. This law was passed to help more people get affordable health care. For those that do not have health care coverage there is a list for people who haven t enrolled in any sort of medical coverage but they may be fined for the 2015 tax return being filed. The amount of the fine is based on the income. If someone had insurance they bought through the Marketplace they MUST have a 1095A form to complete the tax return.

3 Tax Payer Minimal Essential Coverage Exemptions Marketplace Insurance Coverage Use the government issued exemption certificate number Use the 1095A to complete the tax return

4 What is Full Health Care Coverage, or Minimum Essential Coverage (MEC)? When the client has had health care coverage all year. It can be any of the following types of insurance, or a combination of these types of insurance and other: 1.Employer coverage 2.COBRA 3.Medicaid 4.Medicare 5.Retiree insurance

5 Affordable Care Act Minimum Essential Coverage Employer sponsored: W-2 box 12, COBRA, Retiree, etc. Individual health care: individually purchase health coverage, student plans, marketplace Government Sponsored: Medicare A or Advantage, Medicaid (Med-Cal), CHIP, TRICARE, Refugee, Veterans Affairs Other Coverage: certain foreign coverage, coverage for business owners * A full list is available in the 4012

6 Full-Year Coverage for Entire Household The ACA Worksheet needs to have a full healthcare coverage box checked

7 When the worksheet has a full (referring to health care cover for the full year) is checked, line 61 will automatically check off. Luckily, about 80% of VITA clients have Full health care coverage and this is all that needs to be done to identify the tax payer s health care situation

8 2. Exemptions There will be times when a person is exempt from needing health insurance. A complete list is in the These will change slightly by tax season so keep an eye out for updated exemption lists. When Exm is checked, Form 8965 is loaded into the tree

9 Hardship Exemptions from ACA

10 Complete Form 8965 for Exemption Use Part III if there are just a few months that an exemption applies

11 Hardship Exemptions from ACA Individuals that have certain hardships can apply for an exemption to the Marketplace -File an application and provide proof. -ACA will send the client an Exemption Number Certificate that we enter on the Form 8965, Health Coverage Exemptions Form.

12 3. Eligible for Premium Tax Credit? When Mkt is checked, Form 8962 is loaded into the tree

13 Marketplace sends Form 1095-A This section will have information filled in for months that the tax payer had insurance for the marketplace. The client is responsible for bringing this form with them to the tax site if they had insurance from the marketplace at all during the tax season.

14 Example

15 Enter Information from Form 1095-A on Form 8962 Box A, B, and F come right from Form 1095A, the other boxes are calculated by TaxWise

16 If Calculated Premium Tax Credit is Less Than Advance PTC

17 BUT Tax Payer Has to Repay Some or All Excess Advance PTC 1040 Line 46 Form 8962 Part pg. 2

18 If Net PTC 1040 Line 69 tax payer keeps the difference Form 8962 Part pg. 2

19 Having to Pay If you don t have coverage in 2015, you ll pay the higher of these two amounts: 2% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a Bronze plan. $325 per person for the year ($ per child under 18). The maximum penalty per family using this method is $975. TaxWise will calculate this automatically What this looks like in the software

20 How to indicate there is no health care cover and calculating the Shared Responsibility Payment

21 ACA One step at a time - Use the 4012 with each tax return as you get started - Read through the new IRS Publications Practice various scenarios on the software with examples from 4491W. See how much the software does for you. - Work slowly. There is no rush! - Get assistance and work as a team - Let the program coordinator know if you need assistance

22 The End Questions? Contact Amanda Grover Office: , ext. 246 Cell Phone: