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.