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How To Report to the IRS About Health Coverage Under Obamacare

how to report health insurance to irs

This year as you complete your federal income tax return, you’ll need to provide extra information, due to Obamacare.

The Affordable Care Act will require one of three things for the 2014 tax year:

Those who are claimed as a dependent by someone else for healthcare purposes needn’t do any of the above.

How to Report Health Insurance on Tax Return

Most small business owners file their tax returns using Form 1040, Form 1040A or Form 1040EZ. Depending on which form you use, you will be asked to fill out some information on a certain line.

On Form 1040 [1], the healthcare checkbox can be found on Line 61.

On Form 1040A [2], the healthcare checkbox can be found on Line 38.

And on Form 1040EZ [3], filers should direct their attention to Line 11.

How To Tell if You’re Exempt from the Healthcare Requirement

Healthcare.gov has a laundry list of exemptions [4], including low income, being a member of a Native American tribe or being incarcerated.

Depending on the exemption you may be able to claim it on your federal tax return.  Form 8965 [5] is the IRS form for claiming a healthcare exemption.

In other cases, you may have to apply separately via a different form, to claim the exemption.

Claiming an exemption is rather complex.  The departments of Health and Human Services and Treasury will be rolling out tools for taxpayers ahead of this year’s filing deadline, April 15.

According to Health and Human Services (HHS) Secretary Sylvia M. Burwell:

“In the coming weeks, HHS will work with other agencies, tax preparers and community organizations to arm these consumers with the information they need to know as they prepare to file their taxes. We will also be providing helpful tools so that the millions of taxpayers who qualify for an exemption can receive one.”

The government also says that it will “reach out” via emails, phone, and text messages “to people who got coverage through the Health Insurance Marketplace with personalized information that is most relevant to their tax status.”

Minimum Essential Coverage

You are required to have what the government defines as “minimum essential coverage.”

But the IRS goes on to point out that most health care coverage that people have meets the minimum essential coverage requirement.

Minimum essential coverage includes:

The instructions for Form 8965 have more information on what qualifies as minimum essential coverage.

Premium Tax Credit for Healthcare

If you, your spouse, or a dependent enrolled in health insurance through the Marketplace, you may be able to claim a special tax credit called the Premium Tax Credit.

Instructions for qualifying for and claiming the Credit are contained on Form 8962 [6].  (As of this writing, Form 8962 is still a draft and not finalized.)

Additional Information

In the meantime, HHS and the IRS have already made several resources available. They include guides for people who may not be eligible to check that one box on their tax form, or who may have to file additional forms.

For more information, see the Affordable Care Act tax provisions on the IRS website [7].  Or visit Healthcare.gov [8].

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