How will the Affordable Care Act affect my taxes?

The Affordable Care Act, or health care law, contains health insurance coverage and financial assistance options for individuals and families. The IRS administers the tax provisions included in the law. How this will impact your return will vary widely from one taxpayer to the next. Below is some general information, but the subject is complex. The tax preparer at your VITA or TCE site will be able to determine what parts of the law apply to you.

Many people already have qualified health insurance. You meet the minimum requirements of the Affordable Care Act if you (or your dependents) are covered by any of the following:

  • Medicard, Medicaid, TRICARE or CHIP
  • A health insurance plan obtained through your employer
  • An individually purchased insurance plan that meets minimum coverage requirements

If you, and all of your dependents, had health insurance coverage all year

If everyone on your return had coverage all year, you will not have to make a shared responsibility payment on your tax return.

  • If you purchased your insurance through the Health Insurance Marketplace, you may be eligible for a Premium Tax Credit. When you signed up for your insurance, you had a choice to either have the credit paid directly to your insurer, or to pay the full amount of the insurance yourself and claim the tax credit on your income tax return.
  • If your health insurance was provided through your employer, you are not eligible for a premium tax credit (even if you paid a part, or all, of the premiums yourself).

If anyone in your family was not covered for all or part of the year

If anyone in your family was not covered for all or part of the year, you may be responsible for a Shared Responsibility Payment. This depends on your income, and whether or not the uninsured person qualifies for an exemption. Your tax preparer will work with you to determine your situation.