What to Do With the New Proof of Health Insurance Tax Form
Most people simply need to keep Form 1095 with their tax files.
I just received a Form 1095-C from my employer about my health insurance. I already filed my taxes for 2015. Do I need to make any changes because of this form, and should I have sent it in with my tax return?
You don’t need to make any changes to your return, and you don’t send the IRS a copy of the form (the IRS already received a copy from your employer). Keep the form with your tax files to provide evidence that you and your dependents had “minimum essential health coverage” for 2015. If you had eligible coverage for the full year, you should have checked the box on line 61 of your Form 1040 so you wouldn’t have to pay a penalty for going without insurance.
Employers with more than 50 full-time employees were required to send out Form 1095-C by March 31. The form shows the coverage you were offered by your employer and the months when you and any dependents chose to participate in the program. It also shows the employee share of the lowest-cost monthly premium for self-only coverage, which may be different from the amount you paid in premiums if you chose a more expensive policy (this information is used to calculate whether the employer’s premiums are considered to be affordable).
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Employers with fewer than 50 full-time employees had to send out Form 1095-B by the same deadline, which shows the months that you and your dependents were covered.
People who bought insurance through their state marketplace receive Form 1095-A, “Health Insurance Marketplace Statement,” which includes information about coverage purchased for you and anyone in your household. This form should have been mailed out by mid-February this year, but you can also access it through the HealthCare.gov website if you haven’t received it yet, says Alex Tolbert, CEO of Bernard Health, which helps consumers make health care decisions. See 2015 Health Coverage and Your Federal Taxes for more information.
People who received a subsidy to help with premiums on the marketplace will need the information on Form 1095-A when they file their taxes. This form lists monthly premiums, the premium for the second-lowest-cost silver plan (the benchmark premium that was used to calculate the subsidy) and any subsidy you received to help pay the premiums (called the “advance payment of the premium tax credit”). You will need this information to fill out Form 8962, Premium Tax Credit, to reconcile whether you should receive more of a subsidy or pay back some of the subsidy you received. See the Instructions for Recipient with Form 1095-A and the worksheets with the Instructions for Form 8962 for more information about the calculation.
If you didn’t have “minimum essential coverage” for the full year (either through an employer or on your own), you may need to pay the penalty, unless you are exempt from the coverage requirement. If you can claim an exemption, such as if you went without coverage for less than three consecutive months or if your income was below a certain level, you’ll file Form 8965, Health Coverage Exemptions, with your 1040. See the Instructions for Form 8965 for more information. Also see Individual Shared Responsibility Provision Exemptions.
For more information about health insurance and your 2015 taxes, see the IRS’s Affordable Care Act Tax Provisions information page, including its Questions and Answers About Health Care Information Forms for Individuals.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.
-
Average Net Worth by Age: How Do You Measure Up?
Financial advisors discuss the secrets to growing your net worth over time.
By Adam Shell Published
-
Three Charitable Giving Strategies for High-Net-Worth Individuals
If you have $1 million or more saved for retirement, these charitable giving strategies can help you give efficiently and save on taxes.
By Joe F. Schmitz Jr., CFP®, ChFC® Published
-
It’s Not Too Late to Boost Retirement Savings for 2018
retirement Some retirement accounts will accept contributions for 2018 up until the April tax deadline.
By Kimberly Lankford Published
-
How to Correct a Mistake on Your RMDs from IRAs
retirement If you didn't take out the correct required minimum distribution because your brokerage firm made a mistake, the IRS may show some leniency.
By Kimberly Lankford Published
-
Ways to Spend Your Flexible Spending Account Money by March 15 Deadline
spending Many workers will be hitting the drugstore in the next few days to use up leftover flexible spending account money from 2018 so they don’t lose it.
By Kimberly Lankford Published
-
Making the Most of a Health Savings Account Once You Turn Age 65
Making Your Money Last You’ll face a stiff penalty and taxes if you tap your health savings account for non-medical expenses before the age of 65. After that, the rules change.
By Kimberly Lankford Published
-
Reporting Charitable IRA Distributions on Tax Returns Can Be Confusing
IRAs Taxpayers need to be careful when reporting charitable gifts from their IRA on their tax returns, or they may end up overpaying Uncle Sam.
By Kimberly Lankford Published
-
When You Can Expect to Receive Your Tax Refund
taxes The quickest way to receive your tax refund is to file electronically and have the money directly deposited into your bank account.
By Kimberly Lankford Published
-
How a Move Can Change Your 529 Plan Tax Deduction
529 Plans The tax deduction you get for contributing to your state’s 529 plan can disappear if you move to another state.
By Kimberly Lankford Published
-
Tap an IRA Tax-Free With an HSA Rollover
IRAs You can convert tax-deferred money in a traditional IRA into tax-free cash by rolling it over to a health savings account and using it to pay for medical bills.
By Kimberly Lankford Published