It’s September already. Four short months and it will be time to file 2014 taxes. With the implementation of the Affordable Care Act (ACA), the upcoming tax season is going to be challenging for both tax payers and tax preparers. Make sure you’re prepared.
Under the A.C.A. mandate every individual is required to have Minimum Essential Coverage (MEC) or make a Shared Responsibility payment when taxes are filed. So what qualifies as MEC? Insurance purchased through the Federal or one of the State Market Exchanges, most Employer Sponsored Insurances, Medicare Part A, most Medicaid, and CHIPS are all examples of coverage that meet MEC.
If you purchased coverage through one of the Market Exchanges now is the time to make certain you’ve updated your information. This is even more important if you are one of the millions receiving advanced payments of the Premium Tax Credit. Changes in residence, marital status, dependents and income all have an effect on the amount of the credit you may qualify for. Failure to update information in a timely manner could result in re-payment of advanced payments when taxes are filed.
If you did not purchase coverage through one of the Market Exchanges and did not have MEC for the entire year you will be required to pay a Shared Responsibility payment when you file your taxes, unless you qualify for an exemption. There are many exemptions available. To see if any apply to your specific situation visit the IRS website at www.irs.gov/aca . Some exemptions can be claimed when you file your tax return, but most need to be approved through the Healthcare.gov website. If you believe you qualify for an exemption that must be approved through the healthcare.gov website, it is important to apply as early as possible so you will know if you do qualify, and have the exemption information prior to filing your taxes.
As year end quickly approaches it is important to make sure you have everything in order prior to the 2014 filing season.