The Affordable Care Act (ACA) was signed into law in 2010. One provision of the Act required that in 2014 all Americans must have qualified health insurance or face a "Shared Responsibility Payment." Additionally, the Act allowed insurance providers and large employers a one-year delay in reporting the coverage in 2014 to both the IRS and to the taxpayer.
This change impacts your clients and their returns. Are you prepared?
NAPLIA recommends you instruct clients to complete an ACA Confirmation Letteras a standalone document separate from the tax organizer packet. This ACA Confirmation Letter specifically outlines:
- That the ACA requires health care documentation from all taxpayer(s) and members of the household who are dependents in order to avoid the individual shared responsibility. The health care documents are required by law and must be furnished to the accountant for preparation of client tax forms.
- That in the event the taxpayer(s) does not have qualified health insurance formembers of the household who are dependents, the accountant will calculate the penalty and include it with the client return.
Because 2014 is the first year of ACA reporting requirements and the possibility exists for changes, delays and other modifications, our ACA Confirmation Letter language is drafted with respect to the available information as of January 21, 2015 and is subject to change without notice. There are several exemptions beyond the scope of this letter where the shared responsibility penalty would not be imposed. We suggest that the accountant modify the suggested language based on the profile of each accountant’s practice.
To view NAPLIA’s ACA Confirmation Letter CLICK HERE.