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Anne Powelson Anne Powelson
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ACA comes to your tax return

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Welcome to 2015 - the first year when questions about whether you have health insurance will impact your federal tax return. A quick summary of the major impacts:

You will be asked if you have health insurance. You will be asked to confirm you had qualifying health insurance all year for yourself, your spouse and each dependent listed on your return. On the paper copy of returns, there's a simple checkbox near the end. How that checkbox gets filled in (or not) will vary depending on how your taxes are prepared, but you should expect questions about insurance. Qualifying health insurance is defined at irs.gov (search for 'minimum essential coverage'). Employer-sponsored, individual and government-sponsored plans all are acceptable plans.

Those without insurance may have an exemption.There are nineteen listed exemptions to health insurance coverage including; short coverage gaps, unaffordable coverage (over 8 percent of household income), income below the filing threshold and member of a federally-recognized tribe. An exemption to health coverage is reported on a new form, 8965. Six types of exemption, including general hardship and ineligible for Medicaid because the state you live in did not expand Medicaid, require an exemption to be granted through the Healthcare Marketplace. Granting a waiver through the Marketplace requires additional forms and backup information. It can be arduous, but not impossible.

If no exemption applies, a penalty may be due.This additional tax is the greater of 1 percent of your taxable income or $95 per adult, $47.50 per child, but not to exceed the average price of bronze level premiums.

If you received an Advanced Health Care Premium you will need to do a reconciliation.Over 40,000 Mainers purchased insurance through the exchange; the majority used Advanced Premium Credits to help pay the premiums. Each person who received an advance credit is required to file a tax return which includes form 8962. By the end of January the health insurance exchange will issue form 1095-A showing the advance health care premiums received. By using form 8962, you can compare the advance premiums received to those your 2014 income allows. In general, if you show more income than projected, you will repay some of your assistance. If you show less income, the reverse is true. If you paid out of pocket all year for a Health Marketplace Insurance Plan, you may also wish to look at this form to see if you are eligible for any credit. Complicating situations, including marrying during the year, or sharing insurance policies with those claimed on other tax returns (as might be the case for children of divorced parents) mean more sections of the form need to be completed.

Most filers have a minor impact from the ACA changes; they just need to make sure the correct box is checked so no additional taxes are assessed. For the rest, there will be positive and negative stories which come out of this tax season. If you are impacted, it might be a good year to run your situation by a professional.

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