Drake Software blog for tax pros, covering tax, IRS news, and more

Last-Minute ACA Information

Last-Minute ACA Information

Filing season starts in three days, and that means tax professionals around the country are collectively taking a deep breath before the plunge. While the future of the Affordable Care Act (ACA) remains uncertain, it – as of today – still affects tax preparation. So we’ve put together a few last-minute ACA updates to give you a head start.

Health Coverage Tax Tool

If some of your clients will be getting a Form 1095-A and they’re not sure how to put together their healthcare-related tax information, don’t worry: Healthcare.gov just updated their Health Coverage Tax Tool for tax year 2016. It can even help users get information about affordability exemptions.

Employer-Provided Insurance Forms

Since the ACA requires some companies to provide insurance for employees, the information on the relevant tax forms can be used to determine whether a taxpayer had minimum essential coverage. The IRS has outlined basic information about two forms that are used by applicable large employers (ALEs) and providers of minimum essential coverage, respectively: Forms 1095-C and 1096-B.

Form 1095-C, Employer-Provided Health Insurance Offer and Coverage

ALEs (businesses with 50 or more full-time employees) and employers offering “self-insured coverage” often send employees a Form 1095-C, which contains information about the provided healthcare plan. The form must be transmitted with a 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns.

Form 1096-B, Health Coverage Information Return

Health care insurers and businesses below the 50 full-time employee threshold that provide minimum essential coverage send a Form 1096-B. Like a 1095-C, this form includes information about the type of coverage that was provided to the taxpayer, and it must be transmitted with another document: Form 1094-B, Transmittal of Health Coverage Information Returns.

Issuance and Filing Deadlines

The deadline to send Forms 1095-C and 1096-B to employees is March 2, 2017, and the deadlines for employers filing those informational forms with the IRS are February 28, 2017 (paper) and March 31, 2017 (e-file).

ACA Reference Guides

Drake Software put together some ACA reference guides to help you stay on top of any healthcare-related tax changes: Tax Year 2016 ACA Reference Guide, a longer guide containing a full glossary of terms and example scenarios you might encounter; Tax Year 2016 ACA Quick Reference Guide, designed to quickly provide answers to commonly asked questions; and Tax Year 2016 ACA Business Mandate, an employer-provided insurance resource.

Ryan Norton

Whether designing superheroes, penciling caricatures, or just doodling, I always knew I was going to earn some sort of art degree while in college. That was my goal before I decided to trade Edgar Degas for Edgar Allan Poe during a Freshman English class. The BA in English soon morphed into a double-major in English and Philosophy, eventually becoming an MA in English. It only makes sense that I learned of a writing opportunity for a local marketing firm while teaching a first-year college English course. Before I knew it, I was writing and editing tax-related articles for Taxing Subjects, and this has been my home since 2014.