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New Forms, and New Lines on Forms, for Reporting Health Care Information on 2014 Returns

IRS has issued on its website a list of the new 2014 tax forms that taxpayers will need to complete, and new lines on previously existing tax forms that taxpayers will need to fill in, to provide IRS with various items of information regarding the Affordable Care Act (ACA). ( IRS Health Care Tax Tip-2015-01, IRS Website )

Background. Code Sec. 5000A, which was added to the Code by ACA, requires non-exempt U.S. citizens and legal residents, for tax years ending after December 31, 2013, to maintain minimum essential health insurance coverage or pay a penalty. This requirement is referred to as the “individual mandate,” and the penalty is called the “shared responsibility payment.”

There are a number of situations in which individuals are exempt from the penalty imposed by Code Sec. 5000A, including: (a) individuals who do not have an affordable health insurance coverage option available (i.e., individuals whose required contribution for minimum essential coverage exceeds a percentage of their household income—8% for 2014) (Code Sec. 5000A(e)(1)); and (b) any month that includes a day on which an individual had a hardship exemption certification in effect. (Code Sec. 5000A(e)(5))

The Code Sec. 36B premium tax credit is designed to make health insurance affordable for taxpayers who meet certain qualifying requirements. The credit is available for individuals who purchase affordable coverage through Exchanges. Eligible individuals and families can choose to have advance credit payments paid directly to their insurance company to lower what they pay out-of-pocket for their monthly premiums.

New forms and new lines on previously existing forms. For the 2014-2015 tax return filing season, there are some changes to tax forms related to ACA. Along with a few new lines on existing forms, there will also be two new forms that will need to be included with some tax returns. While most taxpayers will only need to check a box on their tax return to indicate that they had health coverage for all of 2014, there are also new lines on Forms 1040, 1040A, and 1040EZ related to the health care law.

Here is a listing of the new forms, and updates to previously existing forms, that taxpayers will use in reporting information regarding ACA on 2014 returns:

Form 8965, Health Coverage Exemptions. Complete this form to report a Marketplace-granted coverage exemption or claim an IRS-granted coverage exemption on the return. Use the worksheet in the Form 8965 Instructions to calculate the shared responsibility payment.

Form 8962, Premium Tax Credit. Complete this form to reconcile advance payments of the premium tax credit, and to claim this credit on the tax return. Additionally, if individuals purchased coverage through the Health Insurance Marketplace, they should receive Form 1095-A, Health Insurance Marketplace Statement, which will help complete Form 8962.

Form 1040.

  • Line 46: Enter advance payments of the premium tax credit that must be repaid.
  • Line 61: Report health coverage and enter individual shared responsibility payment.
  • Line 69: If eligible, claim the net premium tax credit, which is the excess of allowed premium tax credit over advance credit payments.

Form 1040-A.

  • Line 29: Enter advance payments of the premium tax credit that must be repaid.
  • Line 38: Report health coverage and enter individual shared responsibility payment.
  • Line 45: If eligible, claim net premium tax credit, which is the excess of allowed premium tax credit over advance credit payments.

Form 1040EZ.

  • Line 11: Report health coverage and enter individual shared responsibility payment.

Note. Form 1040EZ cannot be used to report advance payments or to claim the premium tax credit.

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