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| Tax School Homepage |
| Same Gender Marriage |
| The IRS has a general rule recognizing a marriage of same-sex spouses that was validly entered into in a domestic or foreign jurisdiction whose laws authorize the marriage of two individuals of the same sex even if the married couple resides in a domestic or foreign jurisdiction that does not recognize the validity of same-sex marriages. For tax year 2013 and going forward, same-sex spouses generally must file using a married filing separately or jointly filing status. Additionally, for tax year 2012 and all prior years, same-sex spouses who file an original tax return on or after Sept. 16, 2013, generally must file using a married filing separately or jointly filing status. For federal tax purposes, the IRS has a general rule recognizing a marriage of same-sex individuals that was validly entered into in a domestic or foreign jurisdiction whose laws authorize the marriage of two individuals of the same sex. |
| A taxpayer who is married cannot file using head of household filing status. However, a same-sex spouse can file using the head of household filing status if he or she can be considered unmarried for tax purposes and lives apart from his or her spouse for the last 6 months of the tax year plus other requirements. If same-sex spouses (who file using the married filing separately status) have a child, the parent who may claim the child as a dependent in the parent with whom the child resides for the longer period of time during the taxable year. If a taxpayer adopts the child of his or her same-sex spouse as a second parent or co-parent, the taxpayer may not claim an adoption credit for expenses incurred in adopting the child of the taxpayer’s spouse. |
| If an employer provided health coverage for an employee’s same-sex spouse and included the value of that coverage in the employee’s gross income, the employee can file an amended Form 1040 reflecting the employee’s status as a married individual to recover federal income tax paid on the value of the health coverage of the employee’s spouse for all years for which the period of limitations for filing a claim for refund is open. |
| The Affordable Care Act |
| The Small Business Health Care Tax credit helps small businesses and small tax-exempt organizations afford the cost of covering their employees, and is specifically targeted for those businesses with low and moderate income workers. Furthermore, The credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees. To qualify for the credit for tax years beginning in 2014 and forward, a small employer must contribute toward premiums on behalf of each employee enrolled in a qualified health plan (QHP) offered by the employer through a Small Business Health Options Program (SHOP Exchange). Tax-free treatment for employer-provided health care to an employee’s child has been extended until the end of the year in which the child turns age 17. |
| The costs and reimbursements under employer health plans for coverage for an employee's eligible children are free of income taxes and FICA and FUTA taxes regardless of dependency tests. Cafeteria plans are plans that allow employees to choose from a menu of at least one qualified benefit and a taxable benefit (such as cash). Employers with cafeteria plans can permit employees to pay for health coverage for children with pre-tax contributions. This tax benefit also applies to self-employed individuals who qualify for the self-employed health insurance deduction. The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan on an employee’s Form W-2. Reporting the cost of health care coverage on Form W-2 is for informational purposes only. |
| The Premium Tax Credit |
| Starting in 2014, individuals and families who get their health insurance coverage through the Health Insurance Marketplace may be eligible for the Premium Tax Credit. In general, you may be eligible for the Premium Tax Credit if you buy health insurance through the Health Insurance Marketplace or if you are ineligible for coverage through an employer or government plan and are within the income limits. |
| If you file your tax return using the filing status Single, Married Filing Jointly, Head of Household or Qualifying Widow/Widower, you may be eligible for the premium tax credit if you meet the other criteria. However, if you are married and you file your tax return using the filing status Married Filing Separately, generally you will not be eligible for the premium tax credit. |
| During enrollment through the Marketplace and using information you provide about your projected income and family composition for the year, the Martketplace will estimate the amount of the premium tax credit you will be able to claim on your tax return. You must file a federal income tax return for any tax year that you receive advance Premium tax credit payments in any amount or if you plan to claim the premium tax credit. |
| Individual Shared Responsibility Provision |
| The individual shared responsibility provision requires you and each member of your family to have minimum essential coverage, an exemption from the responsibility of having minimum essential coverage, or make a share responsibility payment when you file your return in in 2015. Under the Affordable Care Act, the Federal government, State governments, insurers, employers, and individuals share the responsibility for health insurance coverage beginning in 2014. As a result, you will report minimum essential coverage, report exemptions, or make any individual shared responsibility payment when you file your 2014 federal income tax return in 2015. |
| If you and your family need to acquire minimum essential coverage, you can acquire health insurance coverage provided by your employer or health insurance purchased directly from an insurance company. You can acquire health insurance purchased through the Health Insurance Marketplace in the area where you live, where you may qualify for financial assistance. You can also acquire coverage provided under a government-sponsored program for which you are eligible including Medicare, Medicaid, and health care programs for veterans. For purposes of the individual shared responsibility payment, you are considered to have minimum essential coverage for the entire month as long as you have minimum essential coverage for the entire month. |
| You may be exempt from the requirement to maintain minimum essential coverage and thus will not have to make a shared responsibility payment when you file your 2014 federal income tax return in 2015, if you have no affordable coverage options because the minimum amount you must pay for the annual premiums is more than eight percent of your household income. Also, you may be exempt if you have a gap in coverage for less than three consecutive months. Additionally, you may be exempt from coverage if you qualify for an exemption for one of several other reasons, including having a hardship that prevents you from obtaining coverage, or belonging to a group explicitly exempt from the requirement. |
| Copyright © 2014 [Hera's Income Tax School]. All Annual Filing Season Program rights reserved. |
| Revised: 12/14/14 |
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