Deductions, Credits, and Finishing a Return
Health Insurance Marketplace
Health Insurance Overview
Under the Affordable Care Act (ACA), the federal government, state governments, insurers, employers, and
individuals share responsibility for improving the quality and availability of health insurance coverage in the
United States. As a result, all individuals are required to have health insurance or pay a penalty (currently the penalty is $0, and will not impact the taxpayers refund or amount owed. To enroll in health insurance, taxpayers have the option to purchase insurance from the Health Insurance Marketplace.
Individuals who purchase health insurance from the Marketplace may be eligible to receive a tax credit called the Premium Tax Credit (PTC) to help pay for their insurance premiums. Unlike other tax credits, the PTC is given to taxpayers monthly during the year based on an estimate of their yearly income. When a taxpayer files their tax return, the IRS checks their actual income for the year with their estimate to determine if they received the appropriate amount of the credit.
If the taxpayer received too little of the credit (overestimated their income and should have received more assistance throughout the year) they will be eligible to get the additional money back as part of their refund or to offset any amounts owed on the tax return. However, if the taxpayer received too much of the credit (underestimated their income and should have received less assistance throughout the year) they will need to pay back the appropriate amount.
TaxSlayer will make this calculation for us automatically based on the taxpayers income and their completed Form 1095-A from the Marketplace. Thus, all taxpayers who purchased insurance from the Health Insurance Marketplace must have a copy of their FORM 1095-A when filing their return.