Most taxpayers will have to check just one box on their 2016 federal income tax returns to show they had health insurance coverage throughout the year. Others may need to take a few more steps.
Most people who had job-based coverage, Medicare or Medicaid, or who purchased insurance on their own in 2016 will check the box on IRS Form 1040. You can check to make sure your coverage meets the requirements to have health insurance.
You will receive an information form that can help you complete your tax return, such as Form 1095-B or 1095-C. You do not need to include these with your tax return.
Tip → You’ll need IRS Form 1095-A, and IRS Form 8962 if you received a premium tax credit
The Health Insurance Marketplace should have sent you Form 1095-A by early February. If you don’t have it or the information on the form is incorrect, contact your state marketplace. Form 1095-A will tell you the months when you had marketplace coverage and whether you received a premium tax credit.
If you received a premium tax credit, you’ll also need to fill out IRS Form 8962 and file a 2016 federal income tax return even if you don’t usually file. If you don’t, you will not be eligible for premium tax credits in the future.
Tip → You’ll need IRS Form 8965.
You may have to pay a penalty (a fee) if you didn’t have health insurance for some or all of 2016. The penalty this year is $695 or 2.5 percent of your income above $10,350 ($20,700 for couples filing jointly)—whichever is higher—but in no case will you pay more than what it would cost to buy a bronze plan in the Health Insurance Marketplace. Complete IRS Form 8965 to find out:
You may notice on your W-2 form that your employer has reported the cost of your group health insurance benefits. This reporting will not affect the taxes you pay. The value of any health insurance benefits reported on your W-2 should not be included in your income when you file your taxes.