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Navigating Form 1095-A: Health Insurance Marketplace Statement for IRS Form 1095

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Understanding IRS Form 1095-A: Guide to Health Insurance Marketplace Statements and Federal Tax Filing Tax Form 1095

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Navigating the complexities of health insurance and tax forms can be daunting. This article demystifies IRS Form 1095-A, a crucial document for anyone who has received health insurance through the Health Insurance Marketplace. Understanding this form is essential for accurate federal tax filing, claiming premium tax credits, and ensuring compliance with the IRS. Whether you're preparing your tax return or want to understand your health insurance benefits better, this guide will provide you with all the necessary information.

What is Form 1095-A, and Why is it Important?

Form 1095-A, officially known as the Health Insurance Marketplace Statement, is an IRS form critical for individuals who have obtained health insurance through the Health Insurance Marketplace. It serves as proof of health insurance and is indispensable for federal tax filing. The form includes detailed information about your health plan, such as coverage dates and the amount of any premium tax credit you received. This information is essential for reconciling premium tax credits and accurately reporting health coverage on your income tax return. Understanding Form 1095-A is key to avoiding IRS penalties and ensuring you receive any tax credits that are entitled to.

How to Obtain Your Form 1095-A

If you've enrolled in a health plan through the Marketplace, you will automatically receive Form 1095-A. This form is typically mailed to you but can also be accessed digitally. For online access, log into your Health Insurance Marketplace account, where the form is available for download. Knowing how to obtain this form is crucial for timely and accurate tax filing.

Decoding the Information on Form 1095-A

Form 1095-A contains several key pieces of information vital for your tax return. This includes the coverage dates, the amount paid towards health coverage, and any premium tax credits you received. Each part of the form has specific implications for your federal tax return and potential premium tax credits.

Information reported on the form includes: 

  • Your enrollment details: Dates you were enrolled, type of plan, policy number.
  • Premiums paid: Monthly premiums, both paid by you and through advance credit payments.
  • Tax credit information: Amount of premium tax credit received, advance credit payments made.
  • Household members covered: Names and Social Security numbers of all covered individuals.

You'll need this form when filing your income taxes. It helps verify your eligibility for the premium tax credit and ensures accurate tax calculations. You can access your 1095-A online through your Marketplace account or receive it by mail. 

Using Form 1095-A for Federal Tax Return

When preparing your tax return, individuals should carefully review Form 1095-A to ensure that the information is accurate and matches their records. Any discrepancies should be addressed before filing to avoid potential issues with the Internal Revenue Service. Please include Form 1095-A or provide correct information from this form to avoid delays in tax processing or even penalties from the IRS.

Premium Tax Credit and Form 1095-A

The premium tax credit is a significant aspect of Form 1095-A. This credit helps make health insurance more affordable for individuals and families with moderate incomes. If you received this credit, Form 1095-A is crucial for reconciling it on your tax return. This section discusses adjusting your tax credit based on income and family size, ensuring you claim the correct amount.

Feature Description
Purpose The Premium Tax Credit (PTC) is a refundable tax credit that helps eligible individuals and families pay for health insurance purchased through the Health Insurance Marketplace. Form 1095-A is used to report certain information about health insurance coverage to the IRS.
Eligibility To be eligible for the PTC, you must:
- Be a U.S. citizen or legal resident
- Not be incarcerated
- Not be eligible for coverage under a government-sponsored health insurance plan (such as Medicare or Medicaid)
- Have a household income between 100% and 400% of the federal poverty level
How to claim the PTC To claim the PTC, you must complete Form 8962, Premium Tax Credit, and attach it to your federal tax return. You will need the information from your Form 1095-A to complete Form 8962.
What information is on Form 1095-A? Form 1095-A includes information about the following:
- Your name and Social Security number
- The names and Social Security numbers of any dependents who were covered under your Marketplace plan
- The dates of coverage for your Marketplace plan
- The total amount of the monthly premiums for your Marketplace plan
- The second lowest cost Silver plan premium for your area
- The amount of any advance payments of the PTC that you received
Where to get Form 1095-A You can get Form 1095-A from your Marketplace. You can also download it from the IRS website.
Deadline to file Form 8962 The deadline to file Form 8962 is the same as the deadline to file your federal tax return.

Understanding the Connection Between Form 1095-A and Form 8962

Form 8962, the Premium Tax Credit form, is used with Form 1095-A. It's essential for anyone who needs to reconcile or claim the premium tax credit.

Form 1095-A vs. Form 1095-B: What's the Difference?

While Form 1095-A is issued to individuals who purchase insurance through the Health Insurance Marketplace, Form 1095-B is provided to those who receive health coverage through an employer or a government program like Medicare.

Maintaining Records: How Long Should You Keep Form 1095-A? Proof of Health

When maintaining records, it is important to know how long to keep certain documents for tax and health insurance purposes. Form 1095-A, the proof of health insurance, should be kept on file for at least three years from filing the original return. This form is essential for reconciling any advance premium tax credits received and proving that you had qualifying health coverage. However, keeping this form along with other tax-related documents for up to six years is always a good idea, as the IRS generally has up to six years to conduct an audit if they suspect underreported income. Keeping accurate and organized records can help ensure compliance and peace of mind in the event of an audit.

Seeking Assistance: When to Contact the Marketplace Call Center or a Tax Advisor

Navigating the complexities of health insurance and tax forms can be challenging. Professional assistance can be crucial for resolving complex issues and ensuring accurate tax filing, especially in discrepancies or confusion over Form 1095-A.

Key Takeaways

  • Form 1095-A and 1095-B: Understand the differences between Form 1095-A, the Health Insurance Marketplace® Statement, and Form 1095-B, which provides proof of health insurance coverage through other sources.
  • Completing Form 8962: Use Form 1095-A to complete Form 8962 to report premium tax credits on your federal tax return accurately.
  • Avoiding Penalties: Be aware of potential IRS or state penalties for inaccuracies and ensure all information on Form 1095-A is correct to avoid paying an IRS or state penalty.
  • Seeking Tax Advice: Consult with a tax expert or CPA, especially if you receive an audit letter from the IRS or need advice based on your tax situation.
  • Record Retention: Keep Form 1095-A for at least seven years from the date of issuance to comply with IRS requirements.
  • Tax Implications: Understand how Form 1095-A affects your income tax return, particularly Form 1040, and how it relates to the Affordable Care Act.
  • Health Care Exchanges and Plans: Recognize the role of health care exchanges in providing qualified health plans and the relevance of this information for your tax credit during the year.
  • Refunds and Tax Credits: Know how Form 1095-A impacts the possibility of getting a larger refund or having a smaller tax due, and adjust any tax credit payments accordingly.
  • Marketplace Contact: Contact the Marketplace Call Center for assistance with Form 1095-A and related questions about your marketplace health plan.
  • Form 1095-A Details: Pay attention to the detailed information on Form 1095-A, which is used to verify coverage through the marketplace and claim any premium tax credits that may be due.
  • Coverage and Credits: Be aware of the amount of premium tax credit, the need to claim the premium tax credit, and how it relates to coverage during the tax year.
  • Form Varieties: Recognize the existence of various forms like Form 1041 and Form 1120-C, although they may not be directly related to personal health insurance coverage.

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Tickmark, Inc. and its affiliates do not provide legal, tax or accounting advice. The information provided on this website does not, and is not intended to, constitute legal, tax or accounting advice or recommendations. All information prepared on this site is for informational purposes only, and should not be relied on for legal, tax or accounting advice. You should consult your own legal, tax or accounting advisors before engaging in any transaction. The content on this website is provided “as is;” no representations are made that the content is error-free.

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published

December 1, 2023

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Ralph Carnicer, CPA

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