The Affordable Care Act included several tax law changes that went into effect in 2013. Those changes – unrelated to the health care insurance mandate – included a higher threshold for the medical expenses deduction and an additional Medicare and net investment income tax for higher-income Americans.
The health insurance requirement went into effect on January 1, 2014. For most Americans, this meant little or no change to their insurance. The same is true for federal tax returns – most taxpayers will now have a box checked on their tax return that denotes they had qualifying insurance or are eligible for an exemption.
If you purchase health insurance through a government-sponsored marketplace (federal, state or both) or receive the advanced premium tax credit, you'll simply report some additional information on your tax return.
If you were uninsured for no more than two consecutive months in 2014 or face a period in 2015 when you have a gap in health coverage of no more than two months, you may qualify for an exemption that you'll report on your tax return.
If you don't qualify for an exemption, you may be required to pay a penalty when you file. The penalty amount, which will increase annually, is based on the number of uninsured people in your household, household income, and the length of time you're uninsured.
If you don't have insurance, remember you may qualify for the advanced premium tax credit or a government-sponsored plan such as Medicare or Medicaid. Marketplace open enrollment for 2016 is November 1, 2015 to January 31, 2016. To apply, go to www.healthcare.gov.
The ACA also included changes for small businesses owners. Learn more.
- Estimate your 2015 tax penalty
- Find out if you qualify for the advanced premium tax credit with this calculator
- Use the Premium Tax Credit Change Estimator to see if your credit changes based on life events during the year.
- Get a free Year-by-Year Guide to Tax Implications of the ACA (updated for 2015 tax returns), provided by TaxAct.
- See exactly how much the ACA tax law changes impact your tax return with TaxAct.