HITCAP Overview: Let’s Talk ACA Tax Forms! Volunteer Mini-Training June 2015

What Do You Need to Know? What are the new ACA tax forms? The difference between APTC and PTC How to answer basic questions about the new forms How and where to refer callers who have questions about their tax forms How to enter these calls in the CHA database

Terminology: Let’s Talk Terms Premium Tax Credit (PTC): A credit that is used to help pay for health insurance purchased through a Marketplace, like nystateofhealth.ny.gov in New York This tax credit is claimed: When you file taxes Or in advance during the year Second Lowest Cost Silver Plan (SLCSP): Your county’s SLCSP is used to calculate your PTC based on your income Minimum Essential Coverage (MEC): Health insurance that meets minimum standards set by the Federal Government

Terminology: Let’s Talk Terms Federal Poverty Level (FPL): The Federal government sets the FPL to define the poverty income level FPL is a factor for PTC eligibility A NYSOH enrollee is eligible for PTC with incomes between 138%-400% FPL Modified Adjusted Gross Income (MAGI): The threshold income level that is compared to FPL to determine the amount of an enrollee’s PTC MAGI is shown on line 37 of the Form 1040

How is the IRS going to track all of this? Let’s Meet The New Forms! Talking Points: Introduce yourself. How is the IRS going to track all of this? Let’s Meet The New Forms!

Meet the 1095-A: The Statement from the NYSOH Will be sent to people who enrolled in a Bronze, Silver, Gold, or Platinum Marketplace plan Catastrophic plans are not eligible for the PTC and will not receive this Form

Consumers Can Get Form 1095-A In Their NYSOH Account NYSOH mails and posts the Form 1095-A online in inboxes by January 31st.

The Main Tax Form is the 1040

Form 8962: The Reconciliation Form You complete this form if you received APTC or you want to claim PTC at the end of the year as a part of your taxes.

Process Timeline By January 31: NYSOH sent 2014 enrollment information to QHP enrollees in January 2015 *Form 1095-A from NYSOH February 1-April 15: Consumers reconciled APTC or claimed PTC on their federal tax return during tax filing season *Used Form 1095-A from NYSOH to complete IRS Form 8962 Example: Juan is an unmarried adult with no dependents. He lives in Queens and enrolled in a Marketplace plan for 12 months in 2014. When Juan signed up for coverage, he estimated his 2014 income to be $28,000 (244% of FPL). Juan got an APTC of $111 per month and used the full amount towards his premium, for an annual total of $1,338. When Juan completed his federal tax return, his actual 2014 income was $22,000 (191% FPL). The amount of PTC he was eligible for based on his actual income was $186 per month or $2,230 for the year.

Advance Premium Tax Credit Rules for PTC v. APTC Rules for Premium Tax Credit Calculated at tax filing time Not paid in advance Rules for the Advance Premium Tax Credit Monthly credits that reduce premiums Based on estimated income Must reconcile estimated and actual income with IRS Rules for Both Just for NY State of Health plans Not available on catastrophic plans

Other PTC Eligibility Rules Eligibility rules to qualify for the PTC are: Taxpayer must enroll in a health plan through NY State of Health Taxpayer must be lawfully present in the United Stated of America Married taxpayers must file a joint return Taxpayer is not eligible for other MEC, like: Employer-Sponsored Coverage Government Sponsored Coverage (Medicaid, Medicare, VA, CHIP, etc.)

APTC v. PTC Timeline APTC TIMELINE Taxpayer reconciles estimated income v. actual income Taxpayer receives APTCs J M A S O N D F 2015 2016 Taxpayer applies for PTC using the IRS Forms* PTC TIMELINE Taxpayer doesn’t take APTCs and pays the full monthly premium J M A S O N D F 2015 2016 Reconciliation: Truing Up Those APTCS Enrollment = A taxpayer who gets financial assistance estimates his or her 2015 income to determine the amount of APTC. She takes some, all or none of the APTC. 2014 Income = Taxpayer figures out actual 2014 income which may be the same as, more or less than the estimated income. Tax Time = Taxpayer reports their actual income and reconciles their PTC in their taxes. *Remember = No reconciliation is required for PTC if it was not taken in advance. Taxpayers use Form 8962 to claim the credit.

Must pay back everything APTC Repayment Cap Enrollee’s income determines whether they will have to pay back excess credits to the IRS. If your household income is: Filing Single Other Filing Status Less than 200%............................... At least 200 but less than 300%…… At least 300 but less than 400%....... $300 $750 $1,250 $600 $1,500 $2,500 400 or more………………………….. Must pay back everything Example: Bob estimates his 2014 income to be $20,000. He is single individual with no dependents, enrolled in a Marketplace plan for all 12 months in 2014 and Bob used $3,459 in APTCs. When Bob did his 2014 taxes, he learned his 2014 actual income was $28,000 (244% of FPL). Bob should have only got $2,292 in APTCs. This means he would have to repay $1,166 to reconcile his PTC. However, because his repayment is more than the cap for his income level, Bob needs to only give back $750.

Reminder: What if you are uninsured in 2015? Coverage is required for everyone, unless exempt. Penalty is prorated by coverage months. No penalty if uncovered for less than a gap of 3 months. One-Day Rule: Coverage for one day in a month counts as coverage for the whole month. Individual Shared Responsibility Payment Coverage year Whichever is greater 2014 $95 per adult 1% of family income 2015 $325 per adult 2% of family income 2016 $695 per adult 2.5% of family income

Example: Michael, Brooklyn Part I Michael had no MEC in 2015. What can he expect when he finalizes his taxes? He made $40,150 in taxable income in 2015 What is Individual Shared Responsibility Payment for him? The payment in 2015 is $325 or 2% of the income above the filing threshold. Michael will pay the greater of $325 or: $40,150 (household income) - $10,150 (individual filing threshold) = $30,000 x 2% = $600. Michael will pay $600 in additional taxes. This amount will increase each year. In 2016, Michael can expect to pay $750 (2.5% of annual income) .To avoid this, Michael should check out his options on NY State of Health.

Entering HITCAP Cases in the CHA Database HITCAP cases should always go in the CHA database Always ask callers how they found out about us Funding source is HITCP Leave detailed notes, just like CHA cases Primary case handler should be Emily Clark

Funding Source: HITCAP

Time to Test What You Have Learned What is the difference between PTC and APTC? What are the benefits of one or the other? What is Reconciliation? When it is needed and how does it work? What is the Form 1095-A? Who will receive a copy? What should a consumer do with it? How can you help a client to understand why they are receiving a new tax Form? How can you access the 1095-A? What do you do if there are errors? 30

What Kind of Help Can We Provide APTC and PTC The basic differences between them Form 1095-A What the form is and why it is important Who receives the forms and where recipients can access them Where to send recipients for more information

What Kind of Help We Should NOT Provide We cannot provide any tax advice to callers Examples of tax advice: How to complete Form 8962 or Form 1040 Who to claim as a dependent How to report healthcare coverage on a tax return Whether a consumer will have to pay back tax credits or will get additional tax credits Whether a consumer will have to make an Individual Shared Responsibility Payment (penalty for not having coverage)

Who Can Help Consumers? CHA (HITCAP) CHA can help with: Education about the PTC, new IRS Forms Explaining to a consumer how they can access their 1095-A Helping a consumer select the correct SLCSP Explaining the repayment cap if the consumer underestimated their income NYSOH is available at 1-855-766-7860. NYSOH can help when: A consumer needs a replacement 1095-A Form A consumer would like to request a corrected 1095-A IRS is responsible for answering all questions related to tax advice. The IRS is available at www.irs.gov. VITA/TCE provides free tax assistance at sites throughout NY State. 1-800-906-9887

Resources NY State of Health www.info.nystateofhealth.ny.gov/taxcredits Form 1095-A Cover Letters SLCSP table FAQ on Form 1095-A Additional Consumer Materials Webinar hosted by NYSOH: www.info.nystateofhealth.ny.gov/taxcredits IRS Information: www.irs.gov/Affordable-Care- Act/Individuals-and-Families/The-Premium-Tax-Credit Tax Preparers 32

Questions?