1. ACA
and
TaxSlayer
for 2016
December, 2016

3. What’s New for TY2016 New Tools Earlier Issuance of 1095-B/C Forms
Increase in Shared Responsibility Payments
Change in Marketplace Exemptions

4. TaxSlayer Changes in the way ACA data is input
Changes in style and verbiage
Need to learn how to enter unusual scenarios in TS
No Affordability worksheet or Market Coverage Affordability worksheet in TaxSlayer
Use Bogart calculator instead

5. 1095 – A, B, and C
Forms 1095-A, B, and C (all must be provided by 1/31)
Only certain employers are required to issue 1095C
1095C may also include data on employer offered coverage
UPDATE: Forms 1095-B and C don’t need to be mailed until 3/31/17 this year only.

6. Shared Responsibility Payments
Shared Responsibility Payments Increases
2.5% of income over the filing threshold or $695 per adult and $ per child (under 18), limited to $2,085 for 2016
2017 Marketplace enrollment is 11/1/16 – 1/31/17 with special enrollment periods

7. SRP Common Errors Eligible for coverage exemption – did not claim
Income below threshold
Not lawfully present
Coverage Gap
Miscalculated SRP
SRP on Dependent Returns

8. Exemptions New this year
Exemption Code H – Member of a tax household born, adopted, or died during the year
Marketplace will no longer be granting cetificates for certain exemptions. Lifetime ECN’s granted in 2014 and 2015 are still valid. These exemptions are claimed directly from the IRS on Part 3 of Form 8965
New marketplace Exemptions:
Coverage considered unaffordable based on projected income
Unable to renew existing coverage
Certain Medicaid programs that are not minimum essential coverage

9. IRS Exemptions
Members of a health care sharing ministry D
Members of an Indian tribe or eligible for services through an Indian health care provider or the Indian Health Service E
Incarceration F
As of September 1, 2016, these exemptions will not be available from the marketplace.
“Evergreen” exemptions can still be used.
If someone already has an Exemption Certificate Number, use it.

10. Assigning Returns/ Training Required
Detailed person-by-person triage early
Assign to apprentice, experienced or master counselor
Apprentice
full coverage or full market exemption all year (95% of returns last year)
Reviewer: experienced or master
Experienced
one or more exemption needed, SRP, PTC
Reviewer: master
Master
complex affordability exemption, large SRP, large excess PTC

11. Resources P4491 – rewritten 2015 (not much new for 2016)
P4491 – practice exercises at the end (also as separate P5157A)
P4012 – how-to with TaxSlayer
Forms and instructions: 8965, 8962
P974
Flowchart – One Support
NTTC workbook – ACA exercises
Bogart affordability calculator:
in California

12. TaxSlayer Questions
Did you or your family have health insurance at any time in 2016?
Did you purchase health insurance via HealthCare.gov or a State Marketplace?
Verify Your Household Members
Months Insured
Did you receive an exemption certificate from a marketplace, or qualify for exemptions due to circumstances?

13. Here’s where Exemptions are triggered

14. TaxSlayer – Exemptions
Only check this if the gross income exemption – and not the household income exemption -- applies
[Currently, if you check this box, you will still be required to enter an exemption on the next screen.]
Gross income for Line 7
All income received in the form of money, goods, property and services that is not exempt from tax, including any income sources outside the U.S. or from the sale of your main home (even if you can exclude part or all of it)
Include only the taxable portion of Social Security benefits
Include income or gains but not expenses or losses from Schedules C, D and F
Do not include income of any dependents

15. TaxSlayer – Exemptions
TaxSlayer is designed to automatically calculate household income below filing requirement.
Currently, the calculation isn’t accurate because it doesn’t include income of dependents with a filing requirement.
Links go to Marketplace tools

16. TaxSlayer – Exemptions
Note: These exemptions aren’t correct.
Careful: Know the exemption rules. TaxSlayer doesn’t stop you from making errors.
Ex. Short coverage gap can be claimed for an unlimited number of months.

17. Affordability Exemption
Takes you to Healthcare.gov
to determine Bronze and
Silver
But not much use for
California!
Instead, go to:

18. Affordability Exemption
NOTE:
Nothing between these two pages to help determine affordability.
Recommendation:
Use the Bogart Affordability for all cases: A, G, threshold

19. Income Below Filing Threshold
Household income for Line 7 and SRP
Adjusted Gross Income (AGI)
Tax-Exempt
Interest
Excluded Foreign Income
Form 1040, Line 37
Form 1040, Line 8b
Form 2555, Lines 45, 50
Dependent Income
Only if the dependent has a filing requirement
Gross income for Line 7
All income received in the form of money, goods, property and services that is not exempt from tax, including any income sources outside the U.S. or from the sale of your main home (even if you can exclude part or all of it)
Include only the taxable portion of Social Security benefits
Include income or gains but not expenses or losses from Schedules C, D and F
Do not include income of any dependents

20. Affordability: Marketplace Coverage
If there is no employer coverage offer, consider the affordability of marketplace coverage
You’ll need to determine the LCBP (and SLCSP only if income shows eligibility for PTC)
Find these values at

21. Marketplace Coverage Affordability Worksheet Info Needed

22. Affordability
Lowest-cost premium would have to cost more than 8.13% of household income
Start by determining Household Income –AGI from line 37 + Tax-Exempt Interest line 8B + excluded Foreign Income + Dependent Income if the dependent had a filing requirement
Eligibility for employee coverage
If not eligible for employee coverage does the LCBP (after PTC’s) for all non-exempt members of the taxpayer’s family cost more than 8.13% of household income

23. IRS Exemptions: Affordability Exemption
Insurance is considered unaffordable
Lowest-cost premium would have cost more than 8.13% of household income A
Start by determining household income
Then determine the lowest-cost premium available to each person
Adjusted Gross Income (AGI)
Tax-Exempt
Interest
Excluded Foreign Income
Line 37
IRS Form 1040
Line 8b
Lines 45 and 50
IRS Form 2555
Household Income
Any pre-tax deduction for ESI premiums
Dependent Income
Only if the dependent has a filing requirement
If eligible for employer-sponsored insurance:
As an employee: the lowest-cost self-only plan costs more than 8.13% of household income (Code A)
As a member of the employee’s family: the lowest-cost family plan costs more than 8.13% of household income (Code A)
If not eligible for an offer of employer-sponsored insurance:
Lowest cost bronze plan (after PTCs) for all non-exempt members of the taxpayer’s family costs more than 8.13% of household income (Code A)

24. In General (But you still have to do the math)

25. The Last Resort…Marketplace Exemptions
If no other IRS exemption applies, consider helping a client apply for a Marketplace exemption
Application must be mailed and takes time for processing
Write “Pending” if approval has not yet been received.
Useful for:
Religious conscience exemption (available only through the Marketplace)
Hardship exemptions
For exemptions that must be approved by the Marketplace, the FFM is processing exemptions for all states except Connecticut.
Should I Make a Referral to Complete a Hardship Application?
A referral to a health care assister is one option but it causes additional delay
Consider helping the client complete the hardship application at your tax site
No special health care knowledge is needed. Application requires:
Name and contact info
Dependents
Documentation of exemption
Taxpayer’s signature
Hardship

26. Scenario 1
Mary is employed and did not take her employer’s offer because she didn’t want an HMO (the only offer). She went to the marketplace to get insurance and found out it was pretty expensive –they would not give her APTC. So, she does not have insurance. Her AGI is $40,000 (no MAGI adjustments needed). What do you do?
flowchart
Start chart 1
Go to chart 2

27. Interview questions: Any easy exemption?
How much would the employer coverage have
cost?
Say, $250 per month
Say, $300 per month
8.13% of $40,000 is $3,252 0r $271 a month

28. Mary and John Interview determined:
John (dob 6/6/1960) and Mary (dob 7/7/1965) have one dependent Jimmy (8/8/1990) who is not in school and has no job/income. Zip code
Interview determined:
No coverage
No easy exemption
No employer offer
Not eligible for government coverage
Dependent has no income or need to file
No education benefits are being claimed
LCBP: $ SLCSP:$1,030
Affordability does not apply
Total Tax and SRP with Jimmy: $5,699

29. John and Mary continued
What if they don’t claim Jimmy?
LCBP: $510 SLCSP: $662
Affordability does not apply
Total tax and SRP without Jimmy: $5,611 ($88 savings)
Alt 2:
Jimmy is eligible for Medicaid
LCBP: 794 LCSP: 662
Exemption applies to all
Total tax (no SRP) $3,614

30. John and Mary cont’d Alt.3 Alt.4
Mary has an offer of self-only coverage from her employer that would have cost $400 per month and a family offer to cover John and Jimmy of $750 per month.
8.13% of $55,000 = 4, or $372.63/month
Alt.4
Employer’s offer would cover Jimmy but not John.
For John only : LCBP SLCSP

31. Resources
(Center on Budget and Policy Priorities) OneSupport-Tax Training-NTTC Webinars-NTTC TRS Webinars November 30 and December 2, 2016 (Sue’s ACA presentation starts at minute 19)