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What to Know About the Affordable Care Act

What You Need to Know about Obamacare and the Affordable Care Act

Most people will not need to do anything more than maintain their current health insurance coverage in 2014. You will report health insurance coverage or exemptions or make any individual shared responsibility payment when you file your 2014 federal income tax return in 2015.

The Affordable Care Act’s individual shared responsibility provision requires you and each member of your family to either:

• Have minimum essential coverage this year, or

• Qualify for an exemption, or

• Make a shared responsibility payment next year.

Minimum Essential Coverage

It is important to remember that choosing to make the individual shared responsibility payment instead of purchasing health insurance coverage means you will also have to pay your health care costs. For more information about minimum essential coverage, check this minimum essential coverage chart and see questions 14-20 of the IRS Questions and Answers page.

Exemptions

You may be exempt from the requirement to maintain minimum essential coverage for all or part of the year and will not have to make a shared responsibility payment next year if you meet certain requirements. Learn more about exemptions in this chart and in questions 21-24 of the IRS Questions and Answers page. Also, see Healthcare.gov for more information on hardship exemptions.

Individual Shared Responsibility Payment

If you or any of your dependents don’t maintain minimum essential coverage and don’t qualify for an exemption, you will make an individual shared responsibility payment next year. This payment will be based on the number of months that you do not have coverage or an exemption. Check out these basic examples of the payment calculation and the federal tax filing requirement thresholds.

If you get your health insurance coverage through the Health Insurance Marketplace, you may be eligible for the Premium Tax Credit to help make purchasing health insurance coverage more affordable for people with moderate incomes. For more information about your coverage options, financial assistance and the Marketplace, visit HealthCare.gov.

While the individual shared responsibility provision goes into effect in 2014, you won’t report health insurance coverage or exemptions or make any individual shared responsibility payment until you file your 2014 federal income tax return in 2015. IRS.gov/aca will have more Information about the process later this year.

See: How to Reduce Your Chance of an IRS Audit

See: 11 Tips for Taxpayers Who Owe Money to the IRS

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