Anticipating individuals filing their tax returns by April 15, the IRS has released best practices for tax return preparers in gathering ACA compliance information.
The Affordable Care Act’s individual responsibility provisions require all individuals to have minimum essential health coverage, qualify for an exemption, or pay a tax penalty with their federal income tax return. Individuals must report coverage or an exemption for tax years 2017 and 2018.
The IRS says tax return preparers should ask their clients if they had qualifying health care coverage for all members of their tax household for the full year. If the answer is yes, the preparer should review the following documentation: Form 1095-A, Form 1095-B, Form 1095-C and/or Form W-2. If those documents are not available, the preparer should review other information such as medical bills showing an amount paid by an insurance company during the year, documentation from an employer indicating health coverage, a Medicare card, or other such information.
Since tax return preparers are instructed to request copies of 1095 forms, employers should make sure they are issued timely. As the tax filing deadline approaches, it is likely that more employees will be asking for copies of their 1095 Forms.
