DELRAY BEACH, Fla.--(BUSINESS WIRE)--The Affordable Care Act is a complex piece of legislation that many taxpayers are not well versed in. Furthermore many tax professionals do not fully understand the ramifications of the current administration's landmark law. The main items to be aware of are the Premium Tax Credit and the Individual Shared Responsibility payment. The IRS administers these tax provisions and it is essential that accountants, CPAs, enrolled agents and tax preparers can discuss them with their clients when next tax season arrives.
The Premium Tax Credit is applicable to any taxpayers who obtain their health insurance coverage through the Health Insurance Marketplace. Beginning in 2014 any taxpayers who get their coverage in this fashion will be eligible for this tax credit that will make purchasing health insurance more economically viable. The Open Enrollment period for the Health Insurance Marketplace has ended but some individuals may still be able to use it, such as those who have recently become unemployed and no longer have employer sponsored health insurance. In summary if a taxpayer meets any of the following criteria they may be eligible; they buy health insurance through the Marketplace; they are ineligible for coverage through an employer or government plan; they are within certain income limits; they do not file a Married Filing Separately tax return and cannot be claimed as a dependent by another person.
The Individual Shared Responsibility payment refers to the requirement that individuals must have essential minimum health insurance for themselves and each member of their family. If they do not they must have an exemption from the responsibility to have minimum essential coverage, or make a shared responsibility payment when they file their taxes. For this reason it is important their chosen tax professional can correctly advise them on this requirement as it could have a significant impact. The minimum requirement could be met by employer sponsored heath insurance, government sponsored insurance, insurance purchased direct from a company or coverage purchased through the Health Insurance Marketplace.
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