Gathering your health coverage documentation for the tax filing season

Under the Tax Cuts and Jobs Act, the amount of the individual shared responsibility payment is reduced to zero for months beginning after December 31, 2018.

Beginning in tax year 2019, Forms 1040 and 1040-SR do not have the “full-year health care coverage or exempt” box and Form 8965, Health Coverage Exemptions, is no longer being used. You need not make a shared responsibility payment or file Form 8965, Health Coverage Exemptions, with your tax return if you don’t have minimum essential coverage for part or all of the year.

You may receive multiple information forms that you can use to complete your tax return and will keep with your tax records.

The information forms are:

• Form 1095-A, Health Insurance Marketplace Statement
• Form 1095-B, Health Coverage
• Form 1095-C, Employer-Provided Health Insurance Offer and Coverage

Tax year 2020: Requirement to repay excess advance payments of the Premium Tax Credit is suspended

The American Rescue Plan Act of 2021, enacted on March 11, 2021, suspended the requirement to repay excess advance payments of the premium tax credit (excess APTC) for tax year 2020.

If you already filed a 2020 return and reported excess APTC or made an excess APTC repayment, you don't need to file an amended return or take any other action.

If you have not filed your 2020 tax return, here's what to do:

• If you have excess APTC for 2020, you are not required to report it on your 2020 tax return or file Form 8962, Premium Tax Credit (PTC).
• If you're claiming a net premium tax credit (the amount by which your premium tax credit is more than your APTC) for 2020, you must file Form 8962, Premium Tax Credit (PTC).

For details see Tax Year 2020 Premium Tax Credit:

• Frequently Asked Questions
• Fact Sheet
• News Release

For tax years other than 2020, if advance payments of the premium tax credit (APTC) were made for your or a member of your tax family's health insurance coverage through the Health Insurance Marketplace, you must complete Form 8962, Premium Tax Credit (PTC), and attach it to your return. Your tax family consists of every individual you claim on your tax return – yourself, your spouse if filing jointly, and your dependents. You will receive Form 1095-A, Health Insurance Marketplace Statement, which provides you with information about your health care coverage. You should wait to file your income tax return until you receive that form. Use the information from Form 1095-A to complete Form 8962 to reconcile your APTC with the premium tax credit you are allowed or – if you are eligible – to claim the premium tax credit on your tax return. For tax years other than 2020, filing your return without reconciling your advance credit payments will delay your refund and may affect future advance credit payments.

Health insurance providers - for example, health insurance companies – may send Form 1095-B to individuals they cover, with information about who was covered and when. Certain employers will send Form 1095-C to certain employees, with information about what coverage the employer offered.

The IRS has posted questions and answers about the Forms 1095-B and 1095-C. The questions and answers explain who should expect to receive the forms, how they can be used, and how to file with or without the forms.

You should not attach any of these forms to your tax return.

Tax year 2020: Requirement to repay excess advance payments of the Premium Tax Credit is suspended and certain unemployment compensation is excludible

Under ARPA, eligible taxpayers were allowed to exclude up to $10,200 of unemployment compensation received in 2020 on their 2020 Form 1040, 1040-SR, or 1040-NR.  If on your 2020 return you filed you reported excess APTC, or made an excess APTC repayment, and also reported unemployment compensation that is excludible under ARPA, you don’t need to take any action to amend this reporting. Beginning in July 2021, the IRS reviewed tax returns filed prior to the enactment of ARPA to identify tax returns on which both excludible unemployment compensation and excess APTC repayments were reported by the taxpayer. Taxpayers received letters from the IRS, generally within 30 days of the adjustment, informing them of what kind of adjustment was made (such as a refund, payment of IRS debt payment or payment offset for other authorized debts) and the amount of the adjustment. For taxpayers who reported both excludible unemployment income and APTC, the adjustment should have covered both items even though the IRS’s communication to the taxpayer may have mentioned only unemployment compensation.

However, if, because of the excluded unemployment compensation, you are now eligible for deductions or credits not claimed on your original return, you should file a Form 1040-X, Amended U.S. Individual Income Tax Return for tax year 2020. See 2020 Unemployment Compensation Exclusion FAQs — Topic D: Amended Return (Form 1040-X) for more information.

Documentation individuals can gather in advance

Free File and e-filing help simplify tax time

Filing a tax return electronically is the simplest way to file a complete and accurate tax return as it guides you through the process and does all the math for you.

Electronic Filing options include free Volunteer Assistance, IRS Free File, commercial software and professional assistance.