Last year, when people filed their tax return, there were a lot of them who learned that they would owe a payment or a reduced refund because of certain provisions from Affordable Care Act (ACA). Some smaller employers missed out on a credit they could have applied to reduce their total tax.
To give out information for the taxpayers to have a better sense of what to expect at tax time, the Taxpayer Advocate Service has yielded three tools that can help you gauge the certain ACA related credits and payments at any time during the year, even before people file that tax return.
Premium Tax Credit and Advanced Payments
The Premium Tax Credit – Change Estimator aids you in gauging how much of a credit you may be qualified for, even prior to filing a tax return.
The Premium Tax Credit is for qualifying taxpayers with health insurance coverage, and is based on income and the number of family, so any life changes – a change of job, a new born family members – that affects your total household income will affect the credit.
The Premium Tax Credit – Change Estimator looks at those changes and how they can affect credit you’re eligible for.
If a person chooses to have advanced payments of the PTC sent to an insurer to help you with monthly premium costs, it is specifically important to know if the amount of credit changes so that you don’t get stuck with an unexpected bill at tax time.
But remember even if you use that one, you are required to report that change directly to your insurance marketplace to make any changes to your advance tax credit or your policy.
Individual Shared
Responsibility Payment
The provision under Individual Shared Responsibility needs you and each member of your family to have qualifying health insurance for a full 12 months (1 year) span or a health coverage exemption. If you have neither, you may owe a shared responsibility (SRP) at tax time.
The Individual Shared Responsibility Provision-Payment Estimator aids on estimating the payment amount.
This estimation can also give a reference amount to aid you with the decision to enroll in insurance or not. Add the shared payment amount to annually out-of-pocket medical costs for securing insurance coverage by pricing insurance rules on Healthcare.gov. Doing the math pertaining to whether or not to secure health insurance coverage will aid make the best decision for your family.
Small Business Healthcare Tax Credit
For tax year 2014 and the years to follow, the Small Business Health Care Tax Credit Estimator aids small employers and tax-exempt employers to gauge the amount of credit they may receive for maintaining current healthcare coverage or offering it to employees for the first time. This tool will help you with the required calculations to aid in determining if you can take the credit and estimate the amount.
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