The Affordable Care Act (ADA) requires you and each member of your family to have qualifying health care coverage, qualify for an exemption from the responsibility to have minimum essential coverage, or make an individual shared responsibility payment when you file your federal income tax return. For purposes of ADA, qualifying health care coverage is also known as minimum essential coverage.
Minimum existential coverage includes:
Minimum essential coverage does not include coverage that may provide limited benefits.
The individual shared responsibility provision requires that you and each member of your family have qualifying health insurance, a health coverage exemption, or make a payment when you file. If you, your spouse and dependents had health insurance coverage all year, you will indicate this by simply checking a box on your tax return.
Here are some basic facts about the individual shared responsibility provision.
What is the individual shared responsibility provision?
Starting in 2014 the individual shared responsibility provision calls for each individual to have qualifying health care coverage – known as minimum essential coverage – for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return.
Who is subject to the individual shared responsibility provision?
The provision applies to individuals of all ages, including children. The adult or married couple who can claim a child or another individual as a dependent for federal income tax purposes is responsible for making the payment if the dependent does not have coverage or an exemption.
When does the individual shared responsibility provision go into effect?
The provision went into effect on Jan. 1, 2014. It applies to each month in the calendar year.
What do I need to do if I am required to make a payment with my tax return?
If you have to make an individual shared responsibility payment, you will use the worksheets located in the instructions to Form 8965, Health Coverage Exemptions, to figure the shared responsibility payment amount due. The amount due is reported on line 61 of Form 1040 in the Other Taxes section, and on the corresponding lines on Form 1040A and 1040EZ. You only make a payment for the months you did not have coverage or qualify for a coverage exemption.
What happens if I owe an individual shared responsibility payment, but I cannot afford to make the payment when filing my tax return?
The IRS routinely works with taxpayers who owe amounts they cannot afford to pay. The law prohibits the IRS from using liens or levies to collect any individual shared responsibility payment. However, if you owe a shared responsibility payment, the IRS may offset that liability against any tax refund that may be due to you.
For the first time, all taxpayers must include information about their health care coverage to the IRS on their 2014 Form 1040.
Another year, another tax form or two.
2014 was the first tax year that the Individual Shared Responsibility Provision (SRP) of the Affordable Care Act (ACA) went into effect. That means all taxpayers were required by law to have had minimum essential coverage for all 12 months, which includes: