Healthcare act changes taxes

Published 12:00 am Saturday, January 10, 2015

The Affordable Care Act has created the biggest tax code changes in the last two decades, and local accountants are sharing information to hopefully help residents be prepared when they file their taxes.

Accountants Greg White and Shaun McClung said the tax filing season starts Jan. 20 and that almost every tax payer will be affected.

“For this year, there will be an oral statement saying whether you have insurance or not,” McClung said. “Proof is not required this year.”

Automatic qualifying minimum essential coverage comes from:

• Medicare;

• Medicaid;



• Veterans health;

• Employer sponsored plans starting in 2014;

• Bronze level or higher individual plans;

• Peace Corps plan.

And everyone, with the exception of a few exemptions, must have qualifying insurance. There are penalties for those who do not have insurance.

An adult or married couple claiming a child or another individual as a dependent for federal income tax purposes is responsible for making the penalty payment if the dependent does not have coverage or an exemption.

McClung said that penalties are $95 per adult, $47.50 per child, or $285 per family or 1 percent of family income, whichever is greater.

The penalty is also prorated for months of coverage and you are exempt from penalty if you had nine months of uninterrupted coverage.

Exemptions from the ACA include:

• Religious conscience;

• Health care sharing ministry;

• Indian tribes;

• No filing requirement;

• Short coverage gap;

• Hardship;

• Unaffordable coverage options;

• Incarceration;

• Not lawfully present

Applications for exemptions are available at

Those who are eligible for a tax credit on their federal return need a 1095-A, which is a new form for 2014 tax returns.

The form is issued by the federal and/or state health insurance exchange when an individual has purchased insurance through the exchange, with one copy going to the taxpayer and another going to the IRS.

With the number of changes and stipulations, White said they have attended numerous seminars to prepare for this tax season.

Additionally, many tax preparers are expected to increase their fees due to the additional work created by the new code.

“This is the most the tax code has changed in my 30 years of being an accountant,” White said. “Most changes are usually to incentivize small businesses or for employment of certain people.”

McClung said the ACA tax code has been a floating target since the act was passed.

“Only in the last 12 months have we seen instructions,” he said. “This is the first year we’ve seen forms.”

Open enrollment for 2015 coverage runs from Nov. 15 through Feb. 15.

White encouraged residents to take all forms to their tax preparers to ensure correct credits and for a smooth process.

Residents who have questions are encouraged to contact their tax preparers.