Tax Tip of the Week | No. 272 | IRS Issues New Instructions for Obamacare
Tax Tip of the Week | Oct 15, 2014 | No. 272 | IRS Issues New Instructions for Obamacare
The Internal Revenue Service has issued new draft instructions, notices and a publication to help taxpayers and tax practitioners deal with the Affordable Care Act.The draft instructions were recently released for Form 8962, “Premium Tax Credit,” and Form 8965, “Health Coverage Exemptions.” The IRS had previously released draft versions of the forms themselves, both 8962 and 8965, along with draft instructions for several other draft forms for the Affordable Care Act (see IRS Gears up for Impact of Health Care Reform on Tax Season).They are still draft, but in the world of today’s technology and computer-based tax preparation, early drafts—and even more important—the instructions to the drafts, are very important and pretty much the way it will ultimately shake out.The IRS also released last month a one-page publication to help taxpayers find out if they qualify for an exemption from the individual mandate for health coverage or from paying a penalty. Publication 5172, Health Coverage Exemptions includes information about how you get an exemption (see IRS Publishes Guide to Health Coverage Exemptions). The Affordable Care Act calls for each individual to have qualifying health insurance coverage for each month of the year, have an exemption, or make an individual shared responsibility payment when filing their federal income tax return, the IRS said Tuesday.Taxpayers may be exempt if they have no affordable coverage options because the minimum amount you must pay for the annual premiums is more than eight percent of your household income, have a gap in coverage for less than three consecutive months, or qualify for an exemption for one of several other reasons, including having a hardship that prevents you from obtaining coverage or belonging to a group explicitly exempt from the requirement.The IRS was not historically prone to releasing draft documents, but they recognized the sooner that they get that information into the hands of the tax industry, the software development industry and public media at large, the better people are able to understand it and communicate open issues.Stay in touch, we’ll keep you posted.
You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504. Or visit our website.
Rick Prewitt - the guy behind TTW...until next week.