UPDATE FROM THE OFFICES OF CAROL McATEE & ASSOCIATES, CPAS, St. Petersburg, Florida

Carol McAtee & Associates, CPAs

. . . . .continued from last week’s post

Never too Early to Start Thinking About Filing the Next Tax Return

                                          Health Care Issues for 2015 and Beyond

In March of 2010 Congress passed health care legislation which has become known as the “Affordable Care Act” or ACA. For purposes of filing your 2015 tax returns and beyond you may be eligible for a new refundable credit called the “Premium Assistance Credit” (PAC). You are eligible if you have obtained your insurance coverage through the government’s “market place” or American Health Benefits Exchange.
Each state was required to establish an exchange no later than January 1, 2014. For those states that did not do so, there is a Federal Exchange through which insurance can be obtained. The credit is available if the insurance you obtained meets the requirements of “minimal essential coverage” as provided in the legislation. About 8 million individuals have acquired insurance coverage through the Exchanges and about 6.7 million are eligible for the premium assistance credit and you may be one of them. The credit is based on your modified adjusted gross income which will be determined when we prepare your 2015 federal income tax return in 2016.

If you are eligible for the credit, then you may have already benefited by it in the form of an “advanced” PAC where the government has paid a portion of your monthly premiums directly to the insurance provider. In order to determine whether you will receive additional credit or have to give some of the credit back because your income actually increased over what was reported when you applied for the coverage, there will be a reconciliation calculation at the time we prepare your return.

Even if you are not eligible for the PAC, everyone is required to have health insurance coverage and there could be a penalty imposed for not having coverage. Even if you have coverage you will need to report that fact on your Form 1040 and are required to do extra reporting on your return as a result of the legislation. Your employer and/or insurance provider will be sending you a required government report which you will need to provide to us in order to properly prepare your return. You will receive an IRS Form 1095-A if you receive your insurance coverage though the government marketplace. If you have private insurance you will receive an IRS Form 1095-B from your insurance company. If your employer has a health insurance plan you will receive an IRS Form 1095-C from your employer which informs you of the health insurance offer and the coverage received if any.

      Important Health Insurance Marketplace Dates for 2016 Enrollment

•  November 1, 2015: Open Enrollment starts — first day you can enroll in a 2016
insurance plan through the Health Insurance Marketplace. Coverage can start as soon
as January 1, 2016.

*** FYI Plans and prices for 2016 will be available by late October. ***

December 15, 2015: Last day to enroll in or change plans for new coverage to start
January 1, 2016.

January 1, 2016: 2016 coverage starts for those who enroll or change plans by
December 15, 2015.

January 15, 2016: Last day to enroll in or change plans for new coverage to start
February 1, 2016.

January 31, 2016: 2016 Open Enrollment ends. Enrollments or changes between
January 16 and January 31 take effect March 1, 2016.

Coverage start dates

If you enroll before the 15th of any month, your coverage starts the first day of the next month. If you enroll after the 15th of the month, you’ll have to wait until the month after that for your coverage to start. So, for example, if you enroll on January 16, your coverage would start on March 1.

If you don’t enroll in a 2016 health insurance plan by January 31, 2016, you can’t enroll in a health insurance plan for 2016 unless you qualify for a Special Enrollment Period. For details on this and other health insurance coverage options, visit the government’s site at www.healthcare.gov.

If you don’t enroll in 2016, you’ll be fined 2.5% of your income or $695 per adult, whichever is higher. Again, for details visit the government’s site at www.healthcare.gov.

 

If you have any questions about this topic or other tax related questions, please do not hesitate to contact us at 727-327-1999.

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER, OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.

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