Credit: Shutterstock photoO n this year's tax returns, filers must deal with several tricky new rules and paperwork requirements stemming from ObamaCare.
You'll have to start dealing with the tax implications of the health insurance program as soon as new ObamaCare documents reach you, swirling in the blizzard of IRS forms that you receive, starting in January.
The key paperwork that you'll be looking for is a Form 1094-B from your insurer or a Form 1095-C from your employer.
Those verify that you had the health insurance required by ObamaCare, known formally as the Affordable Care Act.
If that or Medicare was the source of your coverage, you check the appropriate box on your Form 1040 tax return.
If you bought coverage through HealthCare.gov, the federal exchange that serves 37 states, or one of the independent state exchanges, you'll get a Form 1095-A.
You'll have to do the math to show that your payments were big enough, given any federal subsidies you received.
If it looks like you did not pay enough but you think you're entitled to at least one of the exemptions that are spelled out by the law, you have to file a Form 8965. If you think you're entitled to a tax credit, you must file Form 8962.
Tax credits go to taxpayers who receive coverage through an exchange and whose income is below specified levels.
Roughly, a family of four with household taxable income below $90,000 is likely to be liable for some credit, says Ernie Harris, executive vice president, corporate development, of Maestro Health.
What about penalties?
There are indeed financial penalties for not having the minimum required coverage. And they are much larger than they were last year. "2014 was a kind of a grace period," said Bill Smith, managing director of CBIZ MHM's national tax office. So last year's penalties were relatively light.
An adult without enough 2015 coverage must pay a $325 penalty or 2% of income, whichever is greater. That's up from $95 last year. Next year that penalty jumps to $695 or 2.5% of income.
There are penalty levels for children and entire families too.
Even if you don't receive your forms, the law holds you, the taxpayer, responsible for figuring out whether you had sufficient coverage.
Harris warns people to avoid certain pitfalls, like mistaking a hospital indemnity plan for health coverage that satisfies ObamaCare's mandate.
"It does not," he said.
If you file a return that says you had appropriate coverage when you did not, you could end up liable for penalties, he adds.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
