By John Machalski
This tax season many individuals will be receiving a new IRS form for the first time. Form 1095 will be used by the IRS to track whether or not an individual had health coverage that met the Affordable Care Act’s (ACA) definition of minimum essential coverage. Depending on the channel an individual used to obtain coverage he will either receive form 1095-A, B or C. Check below to find out which form you should expect and what that means for you this tax season.
Form 1095-A: If you purchased coverage through one of the health care
exchanges established by the ACA, such as through the New York State of Health, you can expect to receive form 1095-A in the mail this tax season. Form 1095-A includes: your name, the coverage you have, any tax credits you were entitled to and whether or not you used those tax credits to help pay for coverage. This form will serve two main functions. First, it will let the IRS know that you had coverage and thus are not liable for a penalty under the individual mandate. Second, it will help the IRS determine if any tax credit you received to help purchase coverage was fair and accurate according to the provisions in the ACA.
Form 1095-B: If you purchased coverage directly from a health care insurer, or received coverage through an employer with less than 50 full-time employees you can expect to receive form 1095-B. Form 1095-B will list the type of coverage you had, whether or not your dependents were covered and the period of valid coverage. This form will help the IRS determine whether you and your tax dependents had minimum essential coverage and whether you are liable for a penalty under the individual mandate.
Form 1095-C: If you received coverage from an employer with more than 50 full-time employees you can expect to receive form 1095-C, if you haven’t received it already. Form 1095-C will include information on the employee as well as the employer, the months that the employee was eligible for coverage, the cost of the least expensive monthly premium the employee could have paid under the employer plan, and whether or not the employee accepted the offer of coverage.
Keep in mind that some individuals may receive more than one of the above forms if they worked for more than one employer or if they worked for a fully-insured applicable large employer. Although figuring out a new tax form may seem daunting at first glance, when you break it down Form 1095 isn’t all that confusing. Remember, at its core Form 1095 is simply meant to track whether or not you had minimum essential coverage as defined by the Affordable Care Act, and what, if any, effect that has on your 2015 tax return.
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