Computers and InternetTaxes

What’s new in income tax software about the Affordable Care Act

Tax return preparation software must be redesigned this year in response to implementation of the Affordable Care Act’s provisions that took effect in 2014. This is what’s new in most tax preparation software packages about Affordable Care Act:

1) a new Health Care tab to the Data Entry Menu with additional screens or tabs to help complete the required IRS forms

2) a general Health Care screen, for general health coverage information

3) screen 8962 for taxpayers who qualify for the Premium Tax Credit (PTC)

4) screen 95A for recording information from the Health Insurance Marketplace Statement (Form 1095-A)

5) screen 8965 for reporting exemptions, noting lack of coverage, and calculating insurance affordability.

6) A Health Care Coverage Questionnaire typically serves as an organizer for gathering required information.

For income tax preparers, it is important to know what questions to ask to avoid problems and potential penalties in addition to knowing what forms to fill out. There has been a topic of significant professional interest lately and, in fact, we do not know what to expect this tax season.

I am responding to the changes with increased service hours this month to answer customer questions about the impact of the Affordable Care Act on taxed either online or via telephone.

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