January 2016: Important Information about Your Taxes This Year

irs1095cImportant Information about Your Taxes This Year

The Affordable Care Act (ACA) mandates that every person must obtain health insurance or pay a penalty to the IRS. This year, you will be getting a new tax form related to ACA which will show whether you and your family members either did or did not have health coverage during each month of the past year. Typically, tax forms from your employer arrive by January 31st. This year, the new 1095-C tax form will arrive later (your W-2 will still be provided by January 31st). Learn More.

Most Important For You to Know

You don’t have to wait for this new tax form to file your 2015 taxes.

You can go ahead and file your taxes before the form arrives. And when you get the form, review it and file away with your other tax documents just in case you get audited.

For most of us, it’s just a “check the box” exercise on your form 1040 similar to last year, and then you’re done. No further action is required to report coverage. Information is provided below on what to do if there was a gap in health care coverage for you or your dependent(s) in 2015.

The Purpose of Form 1095-C

The ACA (Affordable Health Care Act) mandated three new tax forms be used as proof of health care coverage so taxpayers may avoid a penalty for failure to be covered. A Form 1095 is a little bit like a W-2 form. Your employer or insurer sends one copy to the Internal Revenue Service (IRS) and one copy to you. A W-2 form reports your annual earnings while a Form 1095 reports your health care coverage throughout the year. The form applicable to you as an employee of Texas Health Resources is the Form 1095-C.

Here’s a breakdown of the other forms:

  • Form 1095-A, sent to those who purchase health insurance on government marketplaces
  • Form 1095-B, sent to employees of businesses with fewer than 50 full-time employees
  • Form 1095-C, sent to employees of businesses with more than 50 full-time employees.

While 1095-A debuted last year after Americans began purchasing insurance on exchanges and qualifying for related tax credits, tax year 2015 will be the first time the B and C versions are mailed out to insured employees.

Filing without Form 1095-C

Although information from the Form 1095-C can assist you in determining eligibility for the premium tax credit, it is not necessary to have Form 1095-C to file your return. See Publication 974 for additional information on claiming the premium tax credit.

You do not have to wait for Form 1095-C from Texas Health Resources to file your tax return. If needed, you can use other forms of documentation, in lieu of the Form 1095. Other forms of documentation that would provide proof of your insurance coverage include:

  • statements from UHC,
  • payroll statements reflecting health insurance deductions.

You will not need to send the IRS proof of your health coverage. However, you should keep any related documentation with your other tax records. This includes records of your family’s employer-provided coverage, premiums paid, and type of coverage.

What to Do If You Had a Gap in Coverage

If you or your family members did not have coverage for one or more months of the calendar year, you may claim an exemption or make an individual shared responsibility payment.

If you were not insured for every month in tax year 2015, it’s worth exploring any exemptions you might have before paying any related penalties. If you are facing a fine, visit www.healthcare.gov/exemptions-tool to see if there’s a way to reduce or eliminate that penalty.

The penalty is going up for tax filers this April to $695 per adult or 2.5% of household income, whichever is higher, up from $325 per adult or 2% of household income previously. The penalties for children under 18 have also risen to $347.50 from $162.50, and the household cap on fines has more than doubled to $2,085 annually from $975.

When You Will Receive Form 1095-C

You may have heard that the IRS has extended the time for health coverage providers and employers to furnish these forms. The original deadline was February 1, 2016. This deadline has been extended by the IRS for all employers to March 31, 2016. Texas Health is working to get these forms to you as quickly as possible.

What the MyTaxForm.com Website Can Do For You

You will receive the form by mail, unless you elect to receive the form electronically through MyTaxForm.com. To elect an electronic delivery of the form online:

  • Go to mytaxform.com
  • Enter the 5 digit Employer Code: 11138
  • Enter your User ID (your Social Security Number)
  • Enter your PIN:
  • If you have never logged into the system, you will need to enter your Default PIN which will be: MMDD of birth + last 4 of SSN. You will then be prompted to enroll in the Authentication program. This step is designed to ensure secure access to your W-2 information.
  • If you have previously enrolled and logged into the system but have forgotten your PIN, please click on the “Forgot my PIN” link and follow instructions on how to obtain your current PIN.

Where to Go to Get Help

We have provided a link to the IRS website that has specific Q&A regarding this new form: https://www.irs.gov/Affordable-Care-Act/Questions-and-Answers-about-Health-Care-Information-Forms-for-Individuals

Because tax laws are complicated and constantly changing, it is recommended that you consult a tax advisor if you have any questions about the Form 1095-C, tax filing or about your personal tax situation.