10 Tax Tips for the ACA or ObamaCare for the 2019 Tax Season
There are a few taxes related to ObamaCare that require the attention of most tax paying Americans. Below we review the most important tax tips for 2019.
In a nutshell, you’ll likely want to:
- Have your 1095 form filed on your behalf (by your insurer, employer, or the Marketplace) on hand.
- Get Form 8962, Premium Tax Credit (PTC)
- Get Form 8965, Health Coverage Exemptions (the instructions include the worksheet for paying the fee, learn more here: the Shared Responsibility Payment, including line-by-line calculations).
- Get Form 1040 (you may need certain schedules related to healthcare like schedules 2 and 4).
You may also need Second Lowest Cost Silver Plan (SLCSP) Tax Tool, Health Savings Accounts info, Federal Poverty Guideline info, and Modified Adjusted Gross Income. There are more forms that could be needed, get the full breakdown of all our tax tips and all the forms here.
TIP: For 2019 the payment for not having health insurance has been reduced to zero, however this does not apply 2018. So when doing your taxes in 2019 for your 2018 plan year and tax year, make sure you account for the fee owed for 2018.
NOTE: Nothing on this page should be taken as professional tax advice.
For professional tax advice:
- You can also use the IRS Tax Help Line for help: (800) 829-1040
- If you make less than $60,000 a year, you can use the IRS’ Free File option.
- If you make less than $53,000 a year, you can use the IRS’ free Volunteer Income Tax Assistance program.
- The IRS’ Tax Counseling for the Elderly program is free for those 60 and over.
- Enroll America will offer no-cost local help using Intuit TurboTax.
- You can use any major tax assistance software.
Top 10 Tax Tips for the Affordable Care Act for 2019 Tax Season (for 2018 Coverage)
- Don’t panic over your 1095. You can’t self-file a form 1095 as a general rule. If you have marketplace coverage, it’ll help you to claim tax credits and exemptions. If you didn’t the form doesn’t do much of anything. Since it’s someone else’s job to file the form, there isn’t much you can do. If you need to follow up with the form try healthcare.gov and then try the IRS.
- Line 61 of your 1040 requires you to attest that you had “minimum essential coverage” or an exemption for each month of the calendar year (if you were above the tax filing threshold).
- All tax credits, many exemptions, and more are all based on household income compared to the Federal Poverty Level. That is the Modified Adjusted Gross Income (MAGI) of the head of household and spouse, and the Adjusted Gross Income (AGI) of tax dependents as compared to family size.
- You only need to “pay the fee” for months you are a TAX dependent didn’t have coverage or an exemption. You can’t get tax credits for someone who isn’t in your “tax family.” Your “coverage family” should only include those in your “tax family.” This means you’ll owe the fee for anyone you claim if they didn’t have coverage or an exemption for at least one month.
- Many people will have missed a full month of coverage, or will want to file taxes despite being below the tax filing limit, or had coverage options that were “not affordable,” or will have been out of the country. There are over 20 exemptions to take that replace having coverage for one or more months. All exemptions are taken on form 8965. So unless you had coverage for at least one day every month of the year, you need to file 8965.
- Some exemptions need an ECN number. The 8965 instructions explain this. In some cases, you will need to apply to the marketplace for an ECN. If your ECN is pending, just write pending on the 8965 form instead of the ECN.
- If you got tax credits, you must adjust your tax credits on form 8962.
- If you estimated too much household income and claimed too many advanced tax credits, you may owe back money on 8962 (based on income). Luckily, this also works the other way around. If you had a marketplace plan, you could also claim the full amount of tax credits you are owed based on your actual income. So if you didn’t claim the full amount, or even if you did, file 8962 if you got tax credits.
- If you didn’t use an HSA last year, consider one this year. As you’ll see when you fill out the related form, it can actually drop your household income and save you tax money.
- Double check “free file” options. Whether it’s those for-profit tax company with a free product, the local tax people, or the IRS free file, you may want to double check the work yourself. Getting the ACA related forms even a little wrong can mean less money in your pocket.