If you had an Obamacare plan, it affects your 2016 taxes.
Tax time includes health insurance ever since the Affordable Care Act was put into place. The federal government now requires everyone to carry health insurance or pay a tax penalty. Plus, if your coverage was an Obamacare plan, you have a few other things to consider too, before you file your taxes.
Here are a few 2016 Tax Tips:
You should still file taxes as you normally would. On January 20, 2017 President Trump issued an Executive Order designed to scale back parts of Obamacare. However, according to their website, the Internal Revenue Service is still reviewing the implications of the order and has stated that taxpayers should continue to file their tax returns as normal.
You will need Form 1095-A. You should have received your form by mail in early February, from the Health Insurance Marketplace, not the IRS. It will include information about anyone in your household who enrolled in a Health Insurance Marketplace plan for 2016. If you have a healthcare.gov account, you may be able to get your form online.
Reconcile any advance payments of a premium tax credit made on your behalf with the premium tax credit you are claiming on your tax return. (See Tip #4 for more information)
You should make sure your Form 1095-A is accurate. The information will include your coverage, household members, and premium amounts If the form has errors, you can get a new one. Contact the Health Insurance Marketplace for more information.
You need to compare your premium tax credit amounts. If you had a Marketplace plan and used advanced payments of the premium tax credit to lower your monthly payment, you’ll have to “reconcile” these payments when you file. This means you need to compare the amount of the tax credits you used vs. the amount you qualify for based on your final income for 2016. If you used more than you qualified for, you will owe the difference. If you used less, you will receive a refund in the form of a credit.
Important Note: You will also need Form 8962 to calculate your premium tax credit and reconcile your advance payment.
If you have any questions about how your health coverage affects your 2016 federal tax return, consult your tax advisor.