From the IRS tax preparer emails, a few updates on what you need to bring related to your health insurance coverage for your tax preparation. A reminder, if you did not have qualifying coverage for the entire year, then you may owe a penalty of $695 or 2% of your Adjusted Gross Income as penalty.
The Affordable Care Act requires you and your dependents to have health care coverage, an exemption from the coverage requirement, or make a shared responsibility payment for any month without coverage or an exemption with your return. This law will affect your federal income tax return when you file this year
Here are five things you should know about exemptions from the health care law’s coverage requirement and the individual shared responsibility payment that will help you get ready to file your tax return.
- You may be eligible to claim an exemption from the requirement to have coverage and are not required to make a payment. If you qualify for an exemption, you will need to file Form 8965, Health Coverage Exemptions,with your tax return. You can claim most exemptions when you file your tax return. However, you must apply for certain exemptions in advance through the Health Care Insurance Marketplace,
- If you receive an exemption through the Marketplace, you’ll receive an Exemption Certificate Number to include when you file your taxes. If you have applied for an exemption through the Marketplace and are still waiting for a response, you can put “pending” on your tax return where you would normally put your ECN.
- You do not need to file a return solely to report your coverage or to claim a coverage exemption.
If you are not required to file a federal income tax return for a year because your gross income is below your return filing threshold, you are automatically exempt from the shared responsibility provision for that year and do not need to take any further action to secure an exemption.
- If you file a tax return and your income is below the filing threshold for your filing status, you should use Part II of Form 8965, Coverage Exemptions for Your Household Claimed on Your Return, to claim a coverage exemption. You should not make a shared responsibility payment if you are exempt from the coverage requirement because you have income below the filing threshold.
- If you do not have qualifying coverage or an exemption for the year, you will need to make an individual shared responsibility payment for each month without coverage or an exemption when you file your return. Examples and information about figuring the payment are available on the IRS Calculating the Payment page.
We have entered a new year. I hope everyone is doing well here in 2016.
I am back after taking a couple of months off from posting on the website, but we have stayed busy here working on trust and estate planning and honing up tax skill with continuing legal education.
I am happy to announce that I am sharing my life with this lovely lady. We have been engaged for about a year and will be getting married next summer.
A big part of my life is being involved. She shares this joy with me. The attached pictures are of us at the Oklahoma Farm Bureau state convention. We were elected to represent our district in the OKFB Young Farmers and Ranchers (YFR).
Here is looking at a great three years of that service and a great life together with Jennifer!
The case is Ramey v. Sutton and was just decided by the supreme Court.
In the case, Charlene Ramey and Kimberly Sutton were engaged and in a steady relationship for a term of years. Through a male friend’s donation, Sutton gave birth to a child. Ramey stayed at home with the child and became known as “mom” to the child while Sutton was more often referred to as ”Kim”.
After ten years of co-parenting, the couple split and Sutton, as biological mother, sought to end all interaction between Ramey and their child. Ramey brought suit for parental rights (custody and visitations). The District Court, basing its decision upon the couple never finalizing marriage (not allowed in Oklahoma until the U.S. Supreme Court decision earlier this year), issued a summary judgment in favor of Sutton. Ramey appealed.
In a 9-0 decision, the Supreme Court reversed, finding Ramey had standing to have her issues heard, and the case was remanded to District Court.
So, there will still be questions as to what parental rights will be given a non-spouse, non-biological parent, but the courts appear to want the same consideration given as happens with heterosexual couples.
As part of the tax preparer email subscription I get, I received the following from the IRS and wanted to share:
When you enroll in coverage through the Marketplace during Open Season, which runs through Jan. 31, 2016, you can choose to have monthly advance credit payments sent directly to your insurer. If you get the benefit of advance credit payments in any amount, or if you plan to claim the premium tax credit, you must file a federal income tax return and use a Form 8962, Premium Tax Credit (PTC) to reconcile the amount of advance credit payments made on your behalf with the amount of your actual premium tax credit. You must file an income tax return for this purpose even if you are otherwise not required to file a return.
Here are four things to know about advance payments of the premium tax credit:
• If the premium tax credit computed on your return is more than the advance credit payments made on your behalf during the year, the difference will increase your refund or lower the amount of tax you owe. This will be reported in the ‘Payments’ section of Form 1040.
• If the advance credit payments are more than the amount of the premium tax credit you are allowed, you will add all or a portion of the excess advance credit payments made on your behalf to your tax liability by entering it in the ‘Tax and Credits’ section of your tax return. This will result in either a smaller refund or a larger balance due.
• If advance credit payments are made on behalf of you or an individual in your family, and you do not file a tax return, you will not be eligible for advance credit payments or cost-sharing reductions to help pay for your Marketplace health insurance coverage in future years. • The amount of excess advance credit payments that you are required to repay may be limited based on your household income and filing status. If your household income is 400 percent or more of the applicable federal poverty line, you will have to repay all of the advance credit payments. The repayment limits are listed in the table below.
Repayment Limitation Table
Household Income Percentage of Federal Poverty Line
Limitation Amount for Single
Limitation Amount for all other filing statuses
|Less than 200%
|At least 200%, but less than 300%
|At least 300%, but less than 400%
|400% or more