The tax season is upon us and now is the perfect time for taxpayers to make sure they know the relationship between their health insurance coverage and the two tax forms that help figure out the amount of tax credit that is due to each person. Forms 8962 (Premium Tax Credit) and Form 1095-A (Health Insurance Marketplace Statement) are needed by taxpayers who have received health insurance through the Marketplace.
You will receive this form from the Health Insurance Marketplace, it will provide you with all the information necessary for your taxes. If you have received coverage from either the federal or state health insurance exchange, you will receive Form 1095-A via postal my by January 31st, 2015. You will need this statement of calculate your Premium Tax Credit and it is important if you decided to use advance tax credits to help with payment of your monthly insurance premium.
When you receive Form 1095-A you will notice it looks different than other tax forms such as a W-2 or 1099. Although it looks different it is important that you retain your copy of it with the rest of your tax documentation after you complete your tax return. You can request copies of 1095-A from the Marketplace if needed.
Included on Form 1095-A will be the following information:
- Advances you received from a premium tax credit to help offset the cost of your monthly premium.
- The information of the coverage of all the persons living in the household under your insurance plan.
If you received your health coverage from the Marketplace and were eligible to receive a premium tax credit you will have to use this form. Many taxpayers opted to use the credit during the tax year to help lower the cost of monthly premiums.
If you did use the credit help offset the cost of your monthly health insurance premiums, you will have to fill out Form 8962 and figure out the actual amount of tax credit allowance compared to your monthly subsidy. The actual amount of your allowance is affected by your total yearly income and family size for 2014. An import thing to note is that the advance credit was paid directly to your health insurance provider.
If you do not file Form 8962 Premium Tax Credit with your tax return the IRS will reject your return. So that you can avoid any delay of any refunds due to you it is imperative that you make sure all forms are completed correctly and filed with your tax return. The IRS will let you know if you are required to file Form 8962 if you fail to include it with your return. Failure to include this form may affect your eligibility to receive advance premium tax credits in the future.