Financial Help & Taxes

ACE TA Center

Taxes may not be fun, but they play an important role in helping make health coverage more affordable. Below is information on:

This information is accurate for filing 2020 taxes. Note that the federal income tax filing deadline for the 2020 tax year has been extended to May 17, 2021.

Tax filing for individuals with health coverage through the Marketplace 

Regardless of where they live, all clients who enrolled in health coverage through the Marketplace and received an advance premium tax credit (APTC) must file a federal tax return to make sure they received the amount of financial help they were eligible for, based on their actual income during the year. This process is called tax reconciliation.

Clients who did not receive an APTC may still be eligible to get the credit as a lump sum at the end of the year, especially if their income changed during the year, but they will need to file a tax return to find out.

     

Important: If a c lient had coverage throug          h the Marketplace but did not file and reconcile tax credits, they will not be eligible for premium tax credits next year.

Download this ACE TA Center consumer tool to share with consumers to help them understand the relationship between health coverage and taxes, and how to reconcile APTCs through tax filing.

States with individual mandates on proof of coverage

Starting with calendar year 2019, individuals are no longer required to show proof of health insurance on federal tax returns and will not have to pay a federal fee for not having insurance.

However, a number of states have implemented state-level individual mandates, and people in those states will be required to show proof of coverage when filing their state taxes or may have to pay a state penalty.

State

Effective Date

Penalties for Non-Coverage in 2020

California

Jan. 1, 2020

Yes

Washington D.C.

Jan. 1, 2019

Yes

Massachusetts

Jan. 1, 2006

Yes

New Jersey

Jan. 1, 2019

Yes

Rhode Island

Jan. 1, 2020

Yes

Vermont

Jan. 1, 2020

No

Visit the websites above to learn more about the requirement to have health insurance in each state.

Related resources on tax filing

  • Helping Clients Understand Tax Filing and Health Coverage webinar 
    In this recorded webinar, learn about the connection between health coverage and taxes for your clients. Presenters from the ACE TA Center and NASTAD explain how to help your clients prepare to file their 2020 taxes, including which clients need to file based on their 2020 health coverage, what documents they should gather in preparation for filing, and tips for documenting any changes to their health coverage status due to the COVID-19 pandemic. The recorded webinar also walks viewers through important changes to relevant IRS forms (such as the new Recovery Rebate Credit authorized by the CARES Act), describes the tax credit reconciliation process for clients who received advance premium tax credits (APTCs) through the Marketplace (including updated guidance from CMS), and explains who qualifies for an exemption from health coverage and any related financial penalties.

  • Understanding Premium Tax Credits and Cost Sharing Reductions eLearning module
    Need to learn about what financial help is available for consumers who get health coverage through the Marketplace? Through this interactive eLearning module, HIV program staff will learn about premium tax credits, cost sharing reductions, and how these and other resources can help Ryan White HIV/AIDS Program (RWHAP) clients pay for their health insurance and reduce out-of-pocket costs.

  • FAQ: Premium tax credits & cost-sharing reductions
    In this FAQ, read an overview of how PTCs and CSRs can help clients pay premiums and lower the amount they have to pay out-of-pocket for deductibles, coinsurance, and co-payments.

  • Free tax help for qualifying taxpayers
    The Volunteer Income Tax Assistance (VITA) program and Tax Counseling for the Elderly (TCE) program offer free tax help to qualifying taxpayers with incomes below $57,000 and seniors aged 60 or older, respectively. Learn more about the VITA and TCE programs here

  • Taxes and Health Coverage - Consumer Resource
    This consumer tool is designed to help consumers understand the relationship between Marketplace health coverage and taxes and how to reconcile advance premium tax credits (APTCs) through tax filing. 

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