January 28, 2015
HHS to work with non-profit organizations and tax preparers to help consumers understand the intersection of taxes and health care
U.S. Department of Health and Human Services’ Secretary Sylvia M. Burwell announced today that HHS is collaborating with a wide range of non-profit organizations and some of the nation’s largest tax preparers to ensure that the public understands how health care and their taxes intersect. These groups provide resources, advice, and assistance to tax filers across the country. Some are offering on-the-ground, in person support, while others are providing online tools and software to help guide people through the tax filing process. Last year, 91 percent of taxpayers relied on software to do their taxes. This year many tax preparers and organizations updated their online tools to reflect the new Affordable Care Act requirements with the goal of helping consumers easily complete a timely and accurate tax return. Consumers can learn more about free tax assistance and filing options – including assistance in their community - by visiting www.IRS.gov/freefile or www.IRS.gov/VITA.
“Every year, non-profit organizations and tax preparers provide millions of Americans the assistance they need to file their returns and we are pleased to collaborate with them,” said Secretary Burwell. “When it comes to health care and taxes, the only change the vast majority of people will notice is the requirement to check a box to indicate that they had health insurance all year through their job, Medicare, Medicaid, Tricare or the Veterans Affairs. A smaller number of people, including those who purchased coverage through the Health Insurance Marketplaces or those who were uninsured for some or all of the year - will need to take additional steps when filing their taxes. We are working to provide taxpayers with the tools and information they need to file their returns and answer their questions. ”
The 2015 tax season is the first time individuals and families will be asked to report basic information regarding health coverage on their tax returns. For the vast majority of tax filers - about three-quarters – meeting this new requirement will be as simple as checking a box to show they had health coverage for all of 2014. The remaining taxpayers - about one-quarter – will take different steps. It is expected that 3 to 5 percent of taxpayers benefited from advance payments of tax credits to help lower the cost of their Marketplace premiums in 2014. Now that tax season is here, these individuals will need to reconcile those credits in order to ensure that they received the correct amount. It is expected that 10 to 20 percent of taxpayers were uninsured for all or part of 2014 and will claim an exemption from the requirement to have coverage. A much smaller fraction of taxpayers, an estimated 2 to 4 percent, will pay a fee because they made a choice to not obtain coverage they could have afforded and are not eligible for an exemption.
The administration is committed to providing the information and tools tax filers need to understand the new requirements. HHS is working to make sure people know exemptions are available and is committed to ensuring that if someone qualifies, the process of receiving an exemption is simple and easy. Part of this outreach effort involves coordinating efforts with nonprofit organizations and tax preparers.
Across the country, tax preparers and nonprofit organizations are sharing important tax information with consumers. These efforts, as described by these organizations, include:
- AARP Foundation Tax-Aide: AARP Foundation Tax-Aide, the nation’s largest free, volunteer-run tax preparation program, helps 2.6 million low- to moderate-income taxpayers a year at more than 5,000 Tax-Aide community-based sites in all 50 states and the District of Columbia. Over 35,000 volunteers have been trained to help taxpayers understand and comply with their tax responsibilities, receive proper credits and deductions, and file their federal, state and local tax returns. AARP Foundation Tax-Aide volunteers are trained each year to ensure their knowledge of revisions to the U.S. tax code.
- Center on Budget Policy Priorities (CBPP): The Center on Budget and Policy Priorities has created Affordable Care Act trainings for volunteer tax preparers who will help hundreds of thousands of people file their tax returns. These webinars and training modules have been used by more than 4,000 volunteers so far. CBPP will also continue to provide technical assistance to Voluntary Income Tax Assistance Program (VITA) sites during the tax season. This effort complements the training CBPP has made available for health care assisters on tax rules.
- Community Action Partnership: Community Action Partnership provides training, technical assistance, and other member support services to more than 1,000 Community Action Agencies across America. Many of their Community Action Agencies, who serve families with low incomes, participate each year in the Volunteer Income Tax Assistance Program. The VITA program offers free tax help to people who generally make $53,000 or less, persons with disabilities, the elderly, and limited English speaking taxpayers who need assistance in preparing their own tax returns. This tax season, Community Action Partnership is committed to helping VITA volunteers fully understand the impact of the Affordable Care Act on 2015 tax returns. They will host webinars and provide resources through national email newsletters and on their website about the impact of the Affordable Care Act on taxes.
- Corporation for Enterprise Development (CFED): CFED’s Taxpayer Opportunity Network is working to support those who provide free tax preparation assistance for low-income communities by connecting them to the resources, training and data they need to provide quality service to these communities. To help their network of volunteer tax preparers understand new Affordable Care Act provisions and how they affect the tax preparation process, CFED is developing and sharing resources throughout the tax season at www.cfed.org, as well as hosting educational webinars, and providing news and updates through their newsletter, Quality Weekly.
- FileYourTaxes.com: FileYourTaxes.com is providing resources and information on their website to help taxpayers better understand their benefits and responsibilities under the Affordable Care Act. This information includes definitions of terms, important dates, and a list of external resources available to help, including those on federal agency websites. FileYourTaxes.com is also providing a tax preparation interview to help taxpayers complete forms and comply with IRS rules.
- H&R Block: H&R Block offers the full suite of tax preparation services and has trained H&R Block Affordable Care Act specialists to help taxpayers understand how this law may impact their taxes. This expertise is available at any of H&R Block’s 10,000 nationwide offices, and through its online tax preparation software and call-in support. Between now and April 15, taxpayers can go into any H&R Block office and receive a free, personalized Affordable Care Act Tax Impact Analysis to better understand how the Affordable Care Act may impact their taxes. They can also find additional information and enrollment assistance at H&R Block’s Affordable Care Act website. For taxpayers who want to prepare and file their tax return themselves, H&R Block’s do-it-yourself software contains all information and forms necessary for the Affordable Care Act. The DIY software guides users through a series of questions to determine whether they qualify for the Premium Tax Credit, have to pay a penalty, or qualify for an exemption.
- Jackson Hewitt: Jackson Hewitt Tax Service Inc. is a full service multi-channel tax preparation company with approximately 6,300 franchised and company-owned locations, including nearly 3,000 locations in Walmart stores throughout the United States. Jackson Hewitt's tax preparers keep up with tax law changes, including the health care laws. Their ACA Accelerator tool provides clients with a free custom "X-Ray summary document" summarizing potential impact and considerations related to the new tax rules.
- Liberty Tax Service: Liberty is committed to helping consumers file accurate tax returns that reflect the many changes made by the Affordable Care Act and, at the same time, maximize deductions and credits to lower their tax bill and get them the biggest refund possible. Liberty trained its tax preparers on the Affordable Care Act so they can answer health insurance and tax questions and give taxpayers the confidence in knowing their tax returns are prepared by people who understand the law. On Nov. 15, Liberty Tax opened many of its offices to provide seminars and give taxpayers free advice. Liberty has health insurance agents in many of its offices to help consumers enroll in coverage through Feb. 15, the last day for open enrollment in the Marketplaces. Liberty continues to offer free tax advice and encourages consumers to visit the nearest Liberty Tax office for a personalized look at the health care law and its effect on their taxes.
- National Women’s Law Center (NWLC): The National Women’s Law Center is committed to helping families access and understand valuable tax credits to help make ends meet—including the Premium Tax Credit that is making health insurance affordable for millions of women and their families. Through online resources, webinars, and technical assistance, NWLC is supporting community partners around the country who are engaged in education and outreach to potentially eligible families.
- TaxACT: HealthcareACT.com, powered by TaxACT, provides information and calculators to guide taxpayers through the impact of the Affordable Care Act on taxes. Resources include a downloadable whitepaper that breaks downs the tax and health care law changes year by year for individuals and small businesses. Consumers can estimate their individual shared responsibility payment with the TaxACT’s Tax Penalty Calculator. They can also estimate the premium tax credit they might qualify for if they applied through a Marketplace with TaxACT’s Tax Credit Calculator. To assist consumers with tax preparation, TaxACT is providing a number of resources, including step-by-step guidance and tax forms for all health insurance situations. Also available is, HealthWatch - a personalized report with calculations and information to help taxpayers make health insurance decisions for 2015. It also includes all tax return information taxpayers need to apply for 2015 marketplace insurance.
- TurboTax: Intuit TurboTax has simplified the Affordable Care Act tax requirements for consumers to complete their own taxes. This year’s TurboTax software guides consumers through questions about health insurance. The software provides additional information to help consumers understand if they qualify for an exemption and provides assistance to individuals who may be looking to enroll in a health insurance plan. There are no extra costs for Affordable Care Act-related forms when using TurboTax to file. TurboTax also has Affordable Care Act-dedicated Customer Care agents who are there to help if a consumer needs additional information and made available online a series of videos to help Americans understand this year’s new tax requirements. Intuit has also unveiled “Understanding the Affordable Care Act,” a free online resource to help tax professionals understand and prepare for the tax implications of health care reform.
To view a statement made by Secretary Lew and Secretary Burwell on preparing for the upcoming tax season, visit: http://www.hhs.gov/news/press/2015pres/01/20150108a.html
To read a fact sheet about what a lack of health coverage means for taxes, visit: https://marketplace.cms.gov/outreach-and-education/no-health-coverage-and-your-taxes.pdf
To read a fact sheet about Health Coverage and Federal Incomes Taxes visit: http://www.hhs.gov/healthcare/facts/factsheets/2015/01/health-coverage-federal-income-taxes.html