Alyssa Lane
The Affordable Care Act outlines that taxpayers must do at least one of the following: have qualifying health insurance coverage for each month of the year, have an exemption from the requirement to have coverage, or make an individual shared responsibility payment when filing federal income tax returns. However, the Tax Cuts and Jobs Act (TCJA) repealed the penalty for not having health insurance, starting with the 2019 tax year. Therefore, you are no longer required to demonstrate that you have coverage or qualify for an exception when filing your tax returns. Nevertheless, it is important to note that if you live in a state that mandates health coverage, you may be charged a fee when filing your state taxes if you do not have coverage or an exemption. Additionally, those who receive advance premium tax credits through an Exchange must still reconcile the credit when filing their tax returns.
Characteristics and Values
| Characteristics | Values |
|---|---|
| Do you need health insurance to file taxes? | No, you don't need health insurance to file taxes. |
| Do you need to file taxes if you have health insurance? | Yes, if you have health insurance, you must file a tax return. |
| What forms do you need to file taxes with health insurance? | Form 1095-A, Form 8962, Form 1095-B, Form 1095-C, Form 1040, Form 1040-SR |
| What if you don't have Form 1095-A? | You can get a voided Form 1095-A from the Marketplace Call Center. |
| What if you don't have Form 8962? | You can still file your taxes, but it may delay your refund and affect future advance credit payments. |
| Do you need to file taxes if you don't have health insurance? | It depends on the state. Some states require you to have health coverage, and if you don't, you'll be charged a fee when filing state taxes. |
| Were there penalties for not having health insurance before 2019? | Yes, there was a penalty for not having health insurance before 2019, but it was repealed by the Tax Cuts and Jobs Act (TCJA) for tax year 2019 and onwards. |
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What You'll Learn
- You don't need health insurance to file taxes
- You won't be penalised for not having health insurance
- You will need to file a tax return if enrolled in a Health Insurance Marketplace plan
- You will need to complete Form 8962 or explain why it's missing
- You will need to reconcile advance premium tax credits when filing your tax return
You don't need health insurance to file taxes
You don't need health insurance to file your taxes. However, if you live in a state that requires you to have health coverage and you don't have it or qualify for an exemption, you may be charged a fee when filing your state taxes. Before 2019, taxpayers without health insurance were subject to a penalty, and they had to answer questions about their healthcare coverage when filing their tax returns.
If you are enrolled in a Health Insurance Marketplace plan, you must file a tax return. You will need to use Form 1095-A to complete IRS tax Form 8962 and reconcile your premium tax credit when filing your taxes. You should wait to file your income tax return until you receive Form 1095-A, which should arrive by mid-February. It is not necessary to wait for Forms 1095-B or 1095-C to file your tax returns.
If you receive a Form 1095-A showing that advance payments of the premium tax credit were made for you or your family member, you must file an individual income tax return and submit a Form 8962 to reconcile those advance payments. You must also file an individual income tax return and submit a Form 8962 to claim the premium tax credit, even if no advance payments were made for your coverage. However, you are not required to file a tax return solely because you received a Form 1095-B or 1095-C.
If you have excess APTC for 2020, you are not required to report it on your 2020 tax return or file Form 8962. However, for years other than 2020, filing your return without Form 8962 will delay your refund and may affect future advance credit payments.
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You won't be penalised for not having health insurance
If you didn't have health insurance during 2024, you won't be penalised when filing your federal tax return. The fee for not having health insurance, sometimes called the "Shared Responsibility Payment" or "mandate", ended in 2018. However, it's important to note that some states have implemented their own health coverage requirements with penalties for non-compliance. For example, Massachusetts has had an individual mandate and penalty in place since 2006, and Rhode Island implemented a similar mandate in 2020. The penalty amount in Massachusetts is based on the person's income and the cost of health plans available via the state's health insurance exchange.
If you live in a state that requires health coverage and you don't have it (or an exemption), you may be charged a fee when filing your state taxes. Be sure to check with your state or tax preparer to understand the specific requirements and potential penalties for your state. For example, if you live in Maryland, you can visit the Maryland Health Connection website for information on exemptions. Similarly, if you live in the District of Columbia, you can refer to DC Health Link for guidance.
It's worth noting that while there may not be a penalty for not having health insurance at the federal level, having insurance is still important for protecting your health and finances. Accidents, illnesses, or injuries can occur at any time, and without insurance, you may be responsible for the full cost of medical care, which can be very expensive. Therefore, it's advisable to explore your options for obtaining health coverage, even if it's not mandated by your state.
Additionally, if you did have health insurance coverage during the year, you may receive a Form 1095-A, which provides information about your coverage, including the effective date, amount of the premium, and any advance payments made on your behalf. This form is used to complete Form 8962, Premium Tax Credit, when filing your tax return.
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You will need to file a tax return if enrolled in a Health Insurance Marketplace plan
If you enrolled in a Health Insurance Marketplace plan, you must file a tax return. This is because you will need to reconcile your premium tax credit. You can do this by using Form 1095-A to complete IRS Form 8962. This will allow you to determine whether you used the right amount of premium tax credit during the year. If you used too much, you will need to pay it back via taxes. If you used too little, you can claim the difference as a credit.
Form 1095-A is a Health Insurance Marketplace Statement. It will be sent to you at the beginning of the tax filing season, and it will show coverage details such as the effective date, the amount of the premium, and the advance payments of the premium tax credit (APTC) paid on your behalf for the year of coverage. If you had family members enrolled in different states or you updated your family information during the year, you may receive more than one Form 1095-A.
If you do not receive a Form 1095-A, or if the information on the form is incorrect or incomplete, you should contact the state or federal Marketplace from which you received coverage. They may need to send you a corrected or voided Form 1095-A, which may mean you need to amend your return.
If you had Marketplace coverage at any point during the year, you must file your taxes. If you did not have Marketplace coverage, you will not receive Form 1095-A. If your tax return is rejected for not having Form 8962 and you did not have Marketplace coverage, you should contact the Marketplace Call Center, who will help you get a voided Form 1095-A to include with your tax return.
It is important to note that if you live in a state that requires you to have health coverage and you do not have coverage (or an exemption), you will be charged a fee when you file your state taxes.
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You will need to complete Form 8962 or explain why it's missing
If you or a member of your family enrolled in health insurance coverage for 2024 through a Marketplace, you should have received Form 1095-A, the Health Insurance Marketplace Statement. Form 1095-A shows the months of coverage purchased through the Marketplace and any advance payments of the premium tax credit (APTC) paid to your insurance company to help cover your monthly premium.
If APTC was paid on your behalf, or if APTC was not paid on your behalf but you wish to take the PTC, you must file Form 8962 and attach it to your tax return. You will need to complete Form 8962 or provide an explanation for why you're missing the form, and attach it when you refile. You can use Form 1095-A to complete Form 8962 and reconcile your 2024 premium tax credit when you file your 2024 taxes if you qualified for or used the premium tax credit.
The premium tax credit is a tax credit for certain people who enroll, or whose family members enroll, in a qualified health plan. The credit provides financial assistance to pay the premiums for the qualified health plan offered through a Marketplace by reducing the amount of tax you owe, giving you a refund, or increasing your refund amount. If APTC was paid for you or an individual in your tax family, you must file Form 8962 to reconcile (compare) this APTC with your PTC. If the APTC is more than your PTC, you have excess APTC and you must repay the excess, subject to certain limitations.
If you receive a Form 1095-A showing that advance payments of the premium tax credit were paid for coverage for you or your family member, you must file an individual income tax return and submit a Form 8962 to reconcile those advance payments, even if you would not otherwise be required to file a tax return. You also must file an individual income tax return and submit a Form 8962 to claim the premium tax credit, even if no advance payments of the premium tax credit were made for your coverage.
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You will need to reconcile advance premium tax credits when filing your tax return
If you have enrolled in a Health Insurance Marketplace plan, you must file a tax return. If you have received advance payments of the premium tax credit, you will need to reconcile the amount paid in advance with the actual credit you compute when you file your tax return for the year. This is because the advance premium tax credit is an estimate based on projected household income and family composition. The premium tax credit you actually qualify for may be different based on your final income for the year.
To reconcile your advance premium tax credit, you will need to complete Form 8962, Premium Tax Credit (PTC) and attach it to your tax return for the year. You will receive Form 1095-A, Health Insurance Marketplace Statement, which provides you with information about your health care coverage. Use the information from Form 1095-A to complete Form 8962 to reconcile your advance payments of the premium tax credit with the premium tax credit you are allowed and compute your excess APTC or net premium tax credit.
If you used more of the premium tax credit than you qualified for, you will owe taxes on the excess amount. You will need to report this excess amount on your tax return by filing Form 8962. If you used less of the premium tax credit than you qualified for, or if you received an increase in the premium tax credit when you reconciled, you may be eligible for a refund or a lower amount of taxes owed. Even if you do not receive a Form 1095-A, you are still required to file Form 8962 with your tax return.
It is important to note that failing to file your tax return for tax years other than 2020 may prevent future advance credit payments and delay your refund. For the tax year 2020, you are not required to attach Form 8962 to your tax return unless your PTC is more than the APTC paid on your behalf, and you are claiming a net PTC.
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Frequently asked questions
No, you do not need to have health insurance to file your taxes. The Tax Cut and Jobs Act (TCJA) repealed the penalty for not having health insurance, starting with the 2019 tax year.
If you are expecting to receive a Form 1095-A, you should wait to file your income tax return until you receive that form. However, it is not necessary to attach Form 1095-A to your tax return.
Form 1095-A is a Health Insurance Marketplace Statement that includes information about the coverage, who was covered, and when.
You can prepare and file your tax returns without Form 1095-A. You can use other information about your health insurance to file your taxes.
If you live in a state that requires health coverage and you don't have it (or an exemption), you may be charged a fee when you file your state taxes. Check with your state or a tax preparer for more information.
