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What you need to know about the 1095-C

What employees should do with the healthcare W-2

If you worked for an employer with more than 50 full-time employees in 2015, you probably received a new tax form this year. The Affordable Care Act has created some new requirements for employers and individuals, so here’s what employees need to know:

What is the 1095-C?

Think of the 1095-C as the healthcare W-2. Employers use the W-2 to report to the IRS their employees’ wages, as well as the amount of taxes taken out of their paychecks. Employees get a copy with important information needed for filing their tax returns.

Similarly, large employers will use the 1095-C to report to the IRS that they offered their employees affordable health insurance, which is now required through the Affordable Care Act. Employers with more than 50 full-time employees must file 1095-Cs showing whether, and for how long, the company offered health insurance to employees. Your employer has until March 31 to send you the form. 

Will I need the form to file my taxes? 

If you had health coverage through your employer all year, no. To avoid a tax penalty, you will need to specify on your tax return that you and your family had full-year coverage, but most employees will know this information already. Just check the full-year coverage box on your tax return.

I had other insurance last year, too. Will I need the 1095-C to file my taxes?

If you received, or want to receive, tax credits for marketplace insurance, you will need the 1095-C to file your taxes. Maybe you had marketplace insurance before starting a new job, or perhaps your employer’s coverage was considered unaffordable to you. To reconcile what you have paid or what you owe, you will need the information on your 1095-C.

Also, if you had coverage gaps during the year, you will need the 1095-C to file your taxes. You will either need to file for an exemption with your tax return, or pay the penalty for not having coverage. However, you will not need to file the 1095-C form with your tax return. Healthcare tax forms should be kept with your other tax documents.

If you liked this post, you may also like “Coming soon: The healthcare W-2.”

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