ACA Tax Facts For
Individuals & Families
Affordable Care Act contains two provisions that may affect
your tax return this year: the individual shared
responsibility provision and the premium tax credit.
Here's what you should know:
1095-A, 1095-B, AND 1095-C
This year marks the first time that certain taxpayers will
receive new health-care related information forms that they
can use to complete their tax return and then keep with their
These forms are used to report health coverage information for
you, your spouse and any dependents when you file your 2015
individual income tax return in 2016. These forms are also
filed with the IRS. Depending upon your specific
circumstances, (i.e. whether you receive health insurance from
the Health Insurance Marketplace, health coverage providers,
or certain employers), you should have received one or more of
these forms in early 2016. There are three types of
Form 1095-A, Health Insurance
Marketplace Statement. The Health Insurance
Marketplace sends this form to individuals who enrolled in
coverage there, with information about the coverage, who was
covered, and when. This is the second year in which the
Marketplace is issuing Form 1095-A to enrollees. The deadline
for the Marketplace to provide Form 1095-A is February 1,
Form 1095-B, Health Coverage.
Health insurance providers (e.g. health insurance companies)
send this form to individuals they cover, with information
about who was covered and when.
1095-C, Employer-Provided Health Insurance Offer and Coverage.
Employers that offer health coverage referred to as
"self-insured coverage" send this form to individuals they
cover, with information about who was covered and when. The
deadline for coverage providers to provide Forms 1095-B and
employers to provide Form 1095-C is March 31, 2016.
Some taxpayers may not have received a Form 1095-B or Form
1095-C by the time they are ready to file their 2015 tax
return. It is not necessary to wait for Forms 1095-B or 1095-C
in order to file. Taxpayers may instead rely on other
information about their health coverage and employer offer to
prepare their returns.
Note: These new forms
should not be attached to your income tax return.
The individual shared responsibility provision requires
everyone on your tax return (you, your spouse, and dependents)
to have qualifying health care coverage for each month of the
year or have a coverage exemption. Otherwise, you may be
required to make an individual shared responsibility payment.
The key elements of the individual shared responsibility
provision are as follows:
you maintain qualifying healthcare coverage for the entire
year, you don't need to do anything more than report that
coverage on your federal income tax return by simply checking
a box. Qualifying coverage includes most
employer-sponsored coverage, coverage obtained through a
Health Insurance Marketplace, coverage through most
government-sponsored programs, as well as certain other
specified health plans.
you go without coverage or experience a gap in coverage, you
may qualify for an exemption from the requirement to have
coverage (see below). If you qualify for an exemption, use
Form 8965, Health Coverage Exemptions, to report a coverage
exemption granted by the Marketplace or to claim a coverage
exemption on your tax return.
If for any month during the year you don't have qualifying
coverage and you don't qualify for an exemption, you will have
to make an individual shared responsibility payment when you
file your federal income tax return.
payment amount for 2015 is the greater of 2 percent of the
household income above the taxpayer's filing threshold, or
$325 per adult plus $162.50 per child (limited to a family
maximum of $975). This payment is capped at the cost of
the national average premium for a bronze level health plan
available through Marketplaces that would provide coverage for
the taxpayer's family members that neither had qualifying
coverage nor qualify for a coverage exemption.
The instructions for Form 8965, Health Coverage Exemptions,
provide the information needed to calculate the payment that
will be reported on your federal income tax return.
DID YOU KNOW
that Sullivan & Company manages Pension Funds,
Retirement Plans & Taxable Accounts through Archer
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HEALTH COVERAGE EXEMPTIONS
Individuals who go without coverage or experience a gap in
coverage may qualify for an exemption from the requirement to
You may qualify for an exemption if one of the following
- You do not have access to
- You have a one-time gap of less than three consecutive months without
- You qualify for one of several other exemptions, including a hardship
How you get an exemption depends
on the type of exemption. You can obtain some exemptions only
from the Marketplace in the area where you live, others only
from the IRS when filing your income tax return, and others
from either the Marketplace or the IRS.
If you qualify for an exemption, you use Form 8965 to report a
coverage exemption granted by the Marketplace or to claim a
coverage exemption on your tax return.
PREMIUM TAX CREDIT
The premium tax credit (PTC) is a credit that helps eligible
individuals and families with low or moderate income afford
health insurance purchased through the Health Insurance
Marketplace. Claiming the premium tax credit may increase your
refund or lower the amount of tax that you would otherwise
If you did not get advance credit payments in 2015, you can
claim the full benefit of the premium tax credit that you are
allowed when you file your tax return. You must file Form 8962
to claim the PTC on your tax return.
Please call the office if you would like more information
about the premium tax credit or the individual shared
responsibility payment. Help is just a phone call away at
Financial Services at Sullivan & Co. CPAs
Sullivan leads our Financial Services
Division and is here to help you navigate your
financial future. As an Investment Advisor Representative,
he is able to provide an independent opinion on the
investments you already own or are considering buying.
We can structure a portfolio
based on your risk tolerance or we can help you decide how
to invest in your company 401(k) plan. We work with each
client to identify their concerns and to provide solutions
according to their situation.
is also experienced in company retirement plans. If you own
a business that does not have a plan; we can discuss your
options and set up a plan that fits your company.
If your business already has a
plan; we offer a free evaluation of the plan to ensure that
it is up to date and working well for you and your
Our goal is to provide personal, unbiased and independent
advice to help you make well-informed decisions about your
financial life and investments.
Contact Paul Sullivan or Jordana Para to set up a free
initial consultation (301) 657-8080.
And as always if you have any questions about accounting or
investments and how they effect you or your business, please
give us a call. We can help guide you in the right
you can call our offices if you have any questions about these
or any other accounting, tax, financial planning or insurance
related issues, at 301-657-8080.
Regards, Paul Sullivan, CPA
President, Sullivan & Company