Some individuals will have to revisit the health insurance portion of their taxes for the year. The insurance marketplace, typically called Obamacare, is introducing a few factors that are completely foreign to taxpayers. Interestingly, many people are not going down this route for their taxes of last year. How will the insurance marketplace affect taxes for the upcoming year, and what do taxpayers need to watch out for?
Tax Credit based on Final Numbers
The tax credit received for the year is based on the final net income for that year. It is also based on the federal information only. No state information is applicable to health insurance and tax costs.
The Fee
There’s a lot of speculation buzz about how the fee will be implemented. As a reminder, the fee is the amount paid if an individual is not insured for the year. There are exceptions that can apply, which are detailed below. For the most part, the fee is marginal and static. The fee can possibly be waived if Insurance in Lancaster PA was acquired the following year. For example, many 2014 tax files waive the fee because the person became insured in 2015. The same logic will likely apply for the upcoming 2015 taxes. It is also possible to get the fee waived if a taxpayer can fairly prove that they were not aware of the fee as it pertains to the February 15 deadline. This was the official deadline for obtaining insurance without having to pay a fee.
Half the Year Coverage
No matter what year it is, individuals can jump on board with the new insurance policy. If the marketplace policy was only active halfway through the year, a taxpayer will file an 8965 form. This form isolates the months the individual was not insured. The form chronicles whether the taxpayer can qualify for the exemption for the period of time that they did not have insurance. It also affects the premium rate.
Tax law and health insurance are extremely convoluted. Always speak with an Insurance in Lancaster PA representative to get more individualized information about tax and health insurance allocation. The marketplace is not the only option. Susquehanna Insurance Management Ltd is one of the leading sources in Pennsylvania with many years in the community.
