IRS Sets July 31 as Deadline to File 2014 Tax Returns for ACA Premium Tax Credit
The IRS has just announced some important information for taxpayers who filed an extension for the 2014 tax year. As you know, the deadline for filing 2014 Federal returns is October 15, 2015, but you may want to file them sooner this year for some of your clients.
If any of your clients purchased health insurance coverage through a government-sponsored health insurance marketplace and want to keep their advanced premium tax credit for 2016, their 2014 Federal tax return must be filed by July 31, 2015 in order to be included on the IRS' list of taxpayers eligible for the credit. This tax credit can help make purchasing health insurance coverage more affordable for people with moderate incomes.
In general, individuals may be eligible for the premium tax credit if they meet all of the following requirements:
- They must purchase coverage through a marketplace, and
- They don't qualify for government programs like Medicare and Medicaid, and
- They don't have access to employer-sponsored insurance or their employer-provided insurance covers less than 60% of covered benefits OR their premiums are more than 9.5% of their annual household income, and
- Their annual household income is between 100% and 400% of the federal poverty level (percentages may vary by state), and
- They do not file a Married Filing Separately tax return (unless they meet criteria which allows certain victims of domestic abuse and spousal abandonment to claim the premium tax credit using the Married Filing Separately filing status), and
- They cannot be claimed as a dependent by another person.
Open Enrollment for 2016
Open enrollment to purchase 2016 health insurance coverage begins November 1, 2015 and ends January 31, 2016. Healthcare.gov or an applicable state marketplace will use information provided by the IRS to determine a taxpayer's advanced premium tax credit for health coverage beginning January 1, 2016.
Important dates to keep in mind
Here are the important dates to remember for filing your clients' 2014 Federal returns and healthcare coverage:
July 31, 2015: If an extension was filed, you must file your client's final 2014 Federal return by this date in order to keep his/her advanced premium tax credit for 2016.
October 15, 2015: For clients who don't purchase health coverage through the Health Insurance Marketplace, or know they don't qualify for the premium tax credit, you can file their final 2014 Federal returns2015 as late as October 15th.
November 1, 2015: Open enrollment for 2016 healthcare coverage from government-sponsored marketplaces begins.
January 1, 2016: The earliest date coverage can begin for plans being purchased during this open enrollment period.
January 31, 2016: 2016 open enrollment ends.
For more information, visit IRS.gov.
About Lisa Rhatigan
Lisa is Vice President of Business-to-Business Marketing at TaxAct. Prior to joining TaxAct, Lisa was a principal in a business development consulting firm that helped CPA firms and other professional service firms grow their businesses.