By: Ann Schneider
The Affordable Care Act impacts all individuals filing tax returns for the 2014 tax year, but some will feel the impact more than others. Beginning in January, 2014, the Affordable Care Act requires all non-exempt U.S. citizens and legal residents to maintain a qualified health insurance plan. Those non-exempt individuals who fail to maintain the required coverage will be subject to a penalty which will be calculated and assessed along with their individual income tax returns.
Individuals will first see the change on their 2014 tax return where they will be required to state whether they have maintained health coverage throughout the twelve months of the tax year. If the answer to this question is yes, the taxpayer does not need to provide any additional information and no penalty will be assessed. If the answer is no, however, the taxpayer will need to complete another form to either claim an applicable exemption or calculate the amount of penalty which must be paid with the filing of the tax return.
There are some individuals who are exempt from the requirement to obtain minimum health coverage including, among others, individuals who are not required to file a tax return and individuals for whom coverage lapsed less than three consecutive months during the year. These individuals will not have to pay a penalty even if adequate coverage is not maintained for the full tax year.
Finally, individuals who obtained their health coverage through the Marketplace may be entitled to receive a premium tax credit. This credit is provided to individuals who have household incomes between 100% and 400% of the federal poverty level and who do not receive health insurance through their employer (or their spouse’s employer).
Information provided by the law firm of Kirtley, Taylor, Sims, Chadd & Minnette, PC. For more information contact them at 317-550-4333 or visit them online at www.KirtleyTaylorLaw.com.