Premium Tax Credit

Hi, Dan Bosler here. I am an accountant from Fenton, Michigan, about ten miles south of Flint, Michigan. I am an Enrolled Agent, and Enrolled Agents are people licensed by the Department of Treasury to help people deal with IRS tax problems. Our company name is Renie Kate Accounting, and we concentrate on bookkeeping, payroll, tax preparation, and tax problem resolution.

In this session I want to address how you report your insurance costs, advanced insurance coverage credits, and apply for the credit on your 2014 income tax return.

First of all, this only applies if you bought insurance coverage through an Insurance Exchange. If your company pays for all or part of your insurance, you do not get any insurance premium credit. If you pay for private insurance or are covered by free government insurance, you do not qualify for insurance premium credit.

Sorry, guys, I did not write the law.

Secondly, if you did purchase your medical insurance through a federal or a state insurance exchange, you probably are receiving Advanced Insurance Premium Credit, lowering your monthly cost. This must be reported on your tax return, as well as the premiums paid for your insurance coverage.

This is reported on a new form, Form 8962 Premium Tax Credit (PTC for short). The form calculates how your Modified Adjusted Gross Income compares with the Federal Poverty Line as a percentage. If your percentage is higher than 400% of the Federal Poverty Line, you do not qualify for PTC. Period. End of story. No appeals.

If your calculated percentage is less than 133%, you qualify for free Medicaid coverage. Get an appointment so you can get free coverage.

If your percentage is between 100% of the poverty line and 400%, you will qualify for some premium assistance.

You will receive Form 1095-A from your Insurance Exchange Health Care Provider with a monthly breakdown of the premiums you paid during the year, and the Advance PTC applied to lower your monthly payments. If you paid for insurance for all 12 months, you will report the totals of these on line 11, where your PTC will be calculated.

I look for this form to cost you an extra $25-$50, if you are finished with line 11.

However, if there was any month for which you did not pay for insurance, you will be forced to report the information on line 11 for each and every month in lines 12-23. This obviously is a lot more labor intensive, and will likely cost you $50-$100 for the form to be completed.

Hey, don’t shoot the messenger. Tax professionals are not the villain here. We have to implement the law Congress passed. We have to get paid for the extra work we are going to have to do.

The amount of PTC and Advanced PTC will then be reported on the back side of Form 1040 and included in your refund calculation or how much you owe, whichever applies to you.

Have you prepared your own tax return in the past, but it sounds too complicated for you now? No matter where you are in the country, because of internet communications, I can help you at rates that are half the national average. Feel free to visit my website: www.danbosler.com, to email me at dan@danbosler.com, or to call my cell 1-734-358-6314 NOW for assistance. We at Renie Kate will be glad to help you file your tax return accurately and affordably.  Our fees are half the national averages.