Do you know that your health insurance might have an impact on your tax obligations? If you or anyone in your household registered in a 2021 Marketplace insurance plan, you’d need to get some new information when filing your federal income taxes.
Here are five things you should know about your health insurance and tax obligations:
i) Check Your Mailbox for Form 1095-A
It will assist you in filing your 2021 federal income taxes. If you signed up for a Marketplace health plan in 2021, you should receive this new form in the mail by early February. This form contains critical information, such as the monthly premiums you spent on your coverage plan and the amount of any premium tax credits made to your health plan in 2021.
ii) Your Final 2021 Premium Tax Credit Will Be Calculated When You File Your Income Tax Return
The amount of the 2021 premium tax credit depends on your total income for the year, which you will discover when you file your taxes. If you used fewer advance payments of tax credits than you are eligible for during the year, you would receive a credit bonus on your tax return.
If you got more advance payments than you were entitled to, you might be required to pay the difference on your tax return.
iii) If You Don’t Have Insurance Coverage for Part Of 2021, Use Tax Form 8965
If your health insurance started halfway through 2021 and you were not insured at the start of the year, you will need to complete the IRS Form 8965 when you file your income taxes. This will tell you if you are eligible for a tax exemption for the months you were not covered.
iv) Need to Pay Fee with Your Tax If You Don’t Buy Coverage
You might pay fees with your income taxes if you did not have insurance coverage in 2021 and did not get an exemption. If you could have afforded coverage in 2021 but decided not to purchase it and are not eligible for a coverage exemption, you may be required to pay tax with your income tax return.
v) Check Your Mail on Federal Tax Form If You Get Coverage from Other Sources
If you had insurance coverage from another source in 2021, you need to check a mailbox on the government income tax form. You will not receive Form 1095-A. Health insurance from other sources includes coverages from the workplace, Medicaid, Medicare, or a plan purchased outside the Marketplace.