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William Byrnes (Texas A&M) tax & compliance articles

Today is the deadline to sign up for health care (or face penalties)

Posted by William Byrnes on March 31, 2014

In Health Care Tax Tip 2014-11 the IRS reminds taxpayers that today, March 31, is the deadline to sign up for health care for 2014 – or face penalties.

Below are five tips about the Obama Care (ACA) health care law that the IRS wants taxpayers to consider.

• Currently Insured – No Change: If a taxpayer is already insured, do not need to do anything more than continue that insurance.

• Uninsured – Enroll by Today – March 31: The open enrollment period to purchase health care coverage through the Health Insurance Marketplace for 2014 runs through March 31, 2014. When a taxpayer chooses health insurance through the marketplace, the taxpayer may be able to receive advance payments of the premium tax credit that will immediately help lower the monthly premium.

• Premium Tax Credit To Lower the Monthly Premium: If a taxpayer chooses insurance through the Marketplace, the taxpayer may be eligible to claim the premium tax credit. The taxpayer may elect to have advance payments of the tax credit sent directly to the insurance company during 2014 so that the monthly premium the taxpayer must pay is lower, or the taxpayer can wait to claim the credit when filing the tax return in 2015.  If a taxpayer chooses to have advance payments sent to the insurance company, then the taxpayer must reconcile the payments on the 2014 tax return, which will be filed in 2015.

• Change in Circumstances: If a taxpayer receives advance payments of the premium tax credit to help pay for the insurance coverage, then the taxpayer must report “life changes”, such as income, marital status or family size changes, to the Marketplace. Reporting changes will help to make sure the taxpayer has the right coverage and is getting the proper amount of advance payments of the premium tax credit.

• Individual Shared Responsibility Payment: Starting January 2014, taxpayers and the family must have health care coverage or have an exemption from coverage.  Most people already have qualifying health care coverage.  These individuals will not need to do anything more than maintain that coverage throughout 2014.  If a taxpayer can afford coverage but decides not to buy it and remain uninsured throughout the year, that taxpayer may have to make an “individual shared responsibility payment” (a.k.a. the ACA penalty) when filing a 2014 tax return in 2015.

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