A Primer on Filing Taxes, Obamacare, and Related Forms

This year, taxes will get extra tricky, because filers will be required to account for their health insurance on their forms. There are four ways to do so:

1) For taxpayers who do not have Obamacare, the process is simple: check a box indicating you have insurance. This is U.S. Individual Income Tax Return for 2014, line 61

2) If a person opted not to have any insurance, he or she needs to pay the fine/tax, which has been named the “shared responsibility payment”. This is on U.S. Individual Income Tax Return for 2014, Form 1040, line 61; Form 1040A, line 38; or Form 1040EZ, line 11. The instructions to calculate that are here, on page 5.

3) If you have a Marketplace-granted coverage exemption or you are claiming a coverage exemption on your return, fill out form 8965, and mark it on the U.S. Individual Income Tax Return for 2014, Form 1040, line 62.

4) For those who enrolled in an Obamacare plan through the Marketplace, they will have a more comprehensive section and required forms. Here’s the crucial information you need to know about the Form 1095 (Health Insurance Marketplace Statement) and the Form 8962 (Premium Tax Credit, or PTC).

The 1095a

First — please note, you must have the 1095a form to file your Premium Tax Credit form. If you are filing the Premium Tax Credit form, you can’t file a 1040 EZ form and will need to file a traditional 1040.

Now, the 1095a is a form that will be mailed to each household who enrolled in an Obamacare health insurance exchanges plan, whether it was for your state or it was a federal marketplace. The IRS is very clear: This is your proof of insurance.

The 1095a forms were supposed have arrived by January 31, the same date as W-2s and 1099s, but now it seems the new date is Feb. 2nd. You should also be able to download the 1095a form for your household from the exchange website.

The 8962

Unfortunately, the Obamacare tax form you’ll get from your health-insurance provider won’t have all of the information you’ll need to report to the IRS. The Premium Tax Credit Form (8962), requires you to refer to your adjusted gross income on your tax return, as well as looking up the appropriate federal poverty line figure for your state. In addition, you’ll need to do many of the calculations to compare the information you provide from Form 1095a with other tax information from elsewhere on your return.”

Why do I need a form for a form?

When you applied for Obamacare coverage, you estimated your earnings for 2014. The exchange used that figure to calculate your Obamacare credit/subsidy. But, things change with income and households. Therefore, the 8962 is a worksheet to calculate the income amount again based on what you actually made in 2014; and if the figures do not match, your credit amount will have to be adjusted.

In order to be extraordinarily helpful to taxpayers wrestling with how to properly file their taxes and include their health insurance information, the IRS has published a 21 page primer. You can view the 21 pages of instructions here. This has links to three long forms and nine tip sheets.

Good luck, everyone!