The Affordable Care Act (ACA) made it easier for Americans to acquire affordable health care regardless of pre-existing issues.
Unfortunately, it also made tax time a bit more complicated. If you're wondering whether you need to fill out a 1095-B form this tax season, here's what you should know.
Form 1095-B is an IRS document sent to American taxpayers who have received at least the minimum essential health insurance coverage required by the ACA. A standard form will include information about:
Under the original requirements of the ACA, taxpayers had to acquire and maintain minimum essential health insurance coverage for every single month of the year. Before 2019, if you didn't have minimum coverage, you were likely to face a tax penalty known as "shared responsibility payment."
As part of the Tax Cuts and Jobs Act passed for the fiscal year of 2018 and beyond, however, the penalty of not having coverage was eliminated. In 2020, taxpayers do not have to submit the form themselves or wait for a form to file their taxes.
Despite the passage of the Tax Cuts and Jobs Act, any person or entity providing minimum essential coverage must continue sending a 1095-B form to individual taxpayers like you. In general, only certain people will receive a 1095-B form. These include:
If an entity provides minimum health insurance coverage to an individual, it is required to send Form 1095-B to that individual.
If you enrolled in a qualified health plan through the health insurance marketplace, however, you will receive Form 1095-A. If, on the other hand, you were offered or received minimum health care from an employer with at least 50 employees, you may receive Form 1095-C instead of, or in addition to, Form 1095-B.
It's important for anyone participating in a health plan from their state’s medical insurance marketplace to acquire their Form 1095-A before they file, so that they can report information about any advance payments of tax credits.
You should receive either Form 1095-C, Form 1095-B, or Form 1095-A, depending on who provided you with health insurance coverage during the tax year.
You will typically have to acknowledge that you received one of these forms. Details from your federal tax return will also be requested. Taxpayers do not have to submit the forms themselves; they simply input the required information and check a box on their returns to indicate the duration of coverage throughout the tax year.
While the Tax Cuts and Jobs Act brought an end to the shared responsibility payment for not having minimum health coverage, you are still required to include information about your health coverage when filing your taxes. If you are unsure how to file your own taxes or have questions about your potential tax liability, contact a reputable tax professional.