The Patient Protection and Affordable Care Act (PPACA) requires most Americans to have health insurance. This is the Individual Mandate. Failing to purchase coverage without a good excuse will cost you a fine, the Shared Responsibility Payment. How will the federal government assess that fee? Your annual income tax return!
The PPACA also provides tax credit subsidies to help Americans earning less than 400% of the Federal Poverty Level pay their premiums if the policy is purchased through a state or federal insurance exchange. The final calculations are supposed to be recorded on your tax return.
Our friends in Washington are trying to create the form to record your compliance with the new law. As a patriotic American, I thought that I might be able to help. Below is a Schedule I (Insurance) Form.
Health Insurance Compliance
Section I
(Form 1040) 2014
Name as shown on Form 1040, Line 6a____________________________
Social Security Number____-__-____
Name of Individual, Spouse, or Dependent ____________________________
One Schedule I per person.
This form will determine whether or not you had qualified health insurance for 2014. Complete a separate Schedule I for each person listed on Form 1040, Lines 6a through 6c.
A. Insurance
1. Did the above named individual have comprehensive major medical
coverage through an Employer sponsored group health policy for all
of 2014?
___ YES Return to Form 1040, Line 29 and check YES
___ NO Continue
2. Did the above named individual have a qualified individual health
policy for all of 2014?
___ YES Not purchased through a state or federal exchange
___ YES Grandfathered policy (purchased prior to March
2010)
___ YES Grandmothered policy (purchased March 2010
to December 31, 2013)
If YES, Return to Form 1040, Line 29 and check YES
___ YES Purchased through a state or federal exchange.
Proceed to Section B
___ NO Continue
3. Did the above named individual have a qualified health policy
during 2014?
___ 9 – 12 months Return to Form 1040, Line 29 check YES
___ 0 – 9 months Continue
4. Was the above named individual granted a Hardship Exemption?
___ YES Return to Form 1040, Line 29 and check YES
___ NO Return to Form 1040, Line 29 and check NO.
The Shared Responsibility Payment is computed on Form 1040, Line 65
B. Tax Credit Subsidy
The above named individual purchased health insurance through a state or federal exchange.
1. Was an employer sponsored group health policy available through
personal employment, a spouse, or parent?
___ YES Return to Form 1040, Line 29 check YES, Line 29a
check NO
___ NO Continue
2. Was the above named individual incarcerated during 2014?
___ YES Return to Form 1040, Line 29 check YES, Line 29a
check NO
___ NO Continue
3. Insert income from Form 1040, Line 23 ___________________
4. Determine tax credit subsidy from Table I.
5. Did the above named individual qualify for a tax credit subsidy?
___ YES Return to Form 1040, Line 29 check YES, Line 29a
check YES
Enter earned subsidy here _____________ and
on Form 1040, Line 65a.
___ NO Continue
6. Does the above name person want to dance?
___ YES Under the moonlight
___ NO Don’t ask me
7. Did the above named individual receive a tax credit subsidy?
___ YES Return to Form 1040, Line 29 check YES, Line 29a
check NO and enter subsidy received on Form 1040,
Line 65b
___ NO Return to Form 1040, Line 29 check YES, Line 29a
check NO and leave Form 1040, Line 65b blank.
The above is my initial stab at this. The Internal Revenue Service may, or may not, be even this far along in the process. CPA’s are gearing up for forms that may not be available until mid or late February. Tax preparation software will be updated, and updated again before April 15th.
My advice is to make friends with an accountant. You’re going to need one.
DAVE
Yes, I WOULD like to dance. Thank you for asking! Any distraction is welcome – I have always done my own taxes, but this year I am not so sure. I am happy to have “affordable insurance”, somehow the actual details of having this insurance makes it not quite so “affordable”. As Roseanna Roseanna Danna said “there’s always somethin'”. Isn’t that the truth 🙂
We would love to dance with you, Laura. Or to dance while you and your band performed. I am hearing from the people who read the WHOLE post. Glad you were one of them.
[…] is not a big surprise. As I noted several months ago, the forms needed to verify compliant coverage have yet to be created. Too complicated. Too […]