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What IRS Forms 1095-A, 1095-B and 1095-C mean for you

*Updated for tax year 2018

Aside from Form W-2 and the usual tax documents that find their way into your mailbox during tax season, you may also receive a version of Form 1095, which is related to the Affordable Care Act.

While many of us already understand what these forms mean, others are still trying to decipher what to do with this extra document.

To help clear up any confusion as you file your 2018 tax return, here are answers to a few of the most common Form 1095 questions.

What’s The Difference Between Form 1095-A, 1095-B and 1095-C?

What is 1095-A

The 1095-A form (Health Insurance Marketplace Statement) is for people who have health insurance through the Health Insurance Marketplace, often called an exchange.

What is 1095-B

The 1095-B form (Health Coverage) is mailed to individuals by the insurer to report minimum essential coverage. The form details the type of coverage, the months of the year the coverage was provided and the names of those covered by the plan.

What is 1095-C

The 1095-C form (Employer-Provided Health Insurance Offer and Coverage Insurance) is issued to employees by companies with 50 employees or more for TY 2018. This form states the health insurance coverage the employer offered and whether or not the employee took advantage of it. Learn more about what 1095 – C is all about.

Why do I need Form 1095-B or Form 1095-C?

You’ll need Form 1095-B or C to prove you had minimum essential coverage under the Affordable Care Act.

The forms show the months of the year you and your dependents had insurance coverage.

If you, your spouse or your dependents do not have coverage for at least ten months of the year in 2018, and you do not meet any of the exemption requirements, you may have to pay a hefty penalty.

Known as the “individual shared responsibility payment”, the penalty for 2018 returns (due April 15, 2019) has gone up substantially from previous years.

The penalty is now the greater of 2.5 percent of your household income or $695 per adult and $347.50 per child under 18 (up to $2,085 for a family).

Can I receive Form 1095-A, Form 1095-B and 1095-C all in one year?

Yes – it’s possible. If you are covered by a marketplace policy part of the year, and a non-marketplace policy for another portion of the year, you may receive more than one type of form.

In addition, if you work for a company with 50 or more employees and the coverage provided by that employer is purchased through an insurance company, you will then receive 1095-B from the insurance company as well as 1095-C from your employer.

Where do I enter information from Form 1095-A, 1095-B or 1095-C on my tax return?

With TaxAct it’s easy! Answer the easy-to-follow Q&A interview questions regarding how many months you had health insurance coverage and who was covered under your plan as reported on the 1095 form you receive.

If everyone included on your tax return had coverage for all 12 months of 2016, simply check a box and that portion of your tax return is complete.

Do I include Form 1095-B OR Form 1095-C with my tax return?

Keep Form 1095-B and/or Form 1095-C with your records. Do not send either form to the IRS with your tax return.

The IRS receives a separate copy of any forms sent to you by your employer and/or the insurance provider.

You also don’t need to wait to receive the forms before filing your return if you’re sure of the health insurance coverage you received throughout the year.

However, if you expect to receive Form 1095-A, wait until you get it before you file so you can report the correct information from the form on your return.

What if I have adult children on my insurance plan, but they file their own tax returns?

The insurance provider and your employer are only required to provide one Form 1095-B or Form 1095-C to the primary policyholder.

If that’s you, give copies to your adult children and any other people covered under your plan but file their own tax returns.

Note: As part of the changes enacted by the Tax Cuts and Jobs Act, the penalty for not having health insurance will go away after 2018.

About Sally Herigstad

Sally Herigstad is a certified public accountant and personal finance columnist and author of Help! I Can't Pay My Bills, Surviving a Financial Crisis (St. Martin's Griffin). She writes regularly at CreditCards.com, Bankrate.com, Interest.com, RedPlum, and MSN Money. She is an experienced speaker and a member of Toastmasters International. Follow Sally on Twitter.

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