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The Affordable Care Act, or ACA, became law in 2010. It was deemed constitutional by the U.S. Supreme Court in 2012.
And now, during the 2015 tax season, almost every American must deal with the tax realities of the health care law popularly known as Obamacare.
For most taxpayers, the IRS' ACA requirement simply involves checking a new box on tax returns. Others have received a new tax reporting document and must complete added forms or work sheets.
Here's a look at seven pieces of Obamacare tax paperwork that many taxpayers are likely to encounter.
7 tax forms that deal with the Affordable Care Act
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- Individual tax return forms 1040, 1040A and 1040EZ
- Form 1095-A, Health Insurance Marketplace Statement
- Form 8962, Premium Tax Credit
- Form 8965, Health Coverage Exemptions
- Shared Responsibility Payment Worksheet in Form 8965 instruction book
Three returns, three new lines
For the 2014 tax year, individuals must have obtained ACA-approved health care coverage or qualified for an exemption from such coverage. If they did neither, they are obligated to pay a penalty, known as the shared responsibility payment. Each of these situations is accounted for on a new line on each of the three individual tax returns.
If you had ACA-required health care, known as minimum essential coverage, for all of 2014 for yourself, your spouse (if filing jointly), and anyone you could or did claim as a dependent, you simply check the box next to the "full-year coverage" notation on this line and leave the amount section empty.
The check-the-box option is found on:
|Form 1040||Line 61|
|Form 1040A||Line 38|
|Form 1040EZ||Line 11|
Simply checking the box applies to the millions of Americans who have health care coverage through work or who are insured under a variety of other approved programs, such as Medicare, Medicaid or the military.
This easiest of Obamacare tax tasks will be accomplished by most taxpayers, according to the IRS.
Form 1095-A for exchange policies
You also can check the tax return box if you purchased a policy through the marketplace, either HealthCare.gov or a state exchange. Buyers of this type of coverage, however, also must do a bit more tax work.
Exchange policy purchasers will have received Form 1095-A, Health Insurance Marketplace Statement.
The 1095-A shows, among other things, any amount of premium tax credit the policy purchaser received in advance to help pay for the coverage. Using that information, the taxpayer will calculate whether he or she got the correct advance premium credit.
If too large a credit was paid in advance, the taxpayer will lose some expected refund or owe a larger tax bill.
Form 8962 premium tax credit calculations
The bottom line of whether a taxpayer owes for an advance premium tax credit overpayment is figured on Form 8962, Premium Tax Credit.
This form also is used by taxpayers to claim the premium tax credit if they didn't get it when they purchased their marketplace policies.
Explaining ACA exemptions
Some individuals do not have to worry about ACA coverage. They qualify for exemptions from the health care law.
These individuals will explain their exemption status on Form 8965, Health Coverage Exemptions.
ACA exemptions are granted for individuals who:
- Didn't make enough to require they file a return.
- Could not find affordable coverage.
- Are living abroad.
- Or experienced a hardship that prevented them from obtaining coverage under a qualified health plan.
The instructions for Form 8965 have a complete list of ACA exempt situations.
If you are required to file a tax return and want to claim a coverage exemption, attach Form 8965 to your tax return.
Shared responsibility payment
Finally, if you did not have ACA-acceptable health care coverage for all or part of 2014 and are not exempt, you must pay a penalty.
The 2014 tax year penalty is $95 per person or 1 percent of your annual household income, whichever amount is larger. For 2015, the fine increases to $325 per person or 2 percent of your yearly household income -- again, whichever is greater.
The penalty is assessed on a monthly basis, meaning you could owe a portion of the penalty for every month that you or your family members were without coverage.
You figure your precise penalty amount using the shared responsibility payment work sheet in the Form 8965 instruction book.
Once you find what you owe for not having required minimum health care coverage, the tax-filing process circles back to your individual tax return.
Find the check-the-box line of your tax return. There you'll use the entry section at the far right of line 61 on the 1040, line 38 on the 1040A or line 11 on the 1040EZ to enter your shared responsibility payment amount from the work sheets.
Copyright 2015, Bankrate Inc.