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DFAS, Taxes, And The Affordable Care Act

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During January 2016, DFAS will begin providing IRS Forms 1095 (C and/or B depending on your status as a military member, military retiree or annuitant, or federal civilian employee).  The information will be necessary when you prepare to file your 2015 federal income tax return. Like your other tax and pay statements, the new forms will be available in your myPay account when they are released (no later than Jan. 31, 2016).

Officially known as the Patient Protection and Affordable Care Act, the ACA requires all Americans to have qualifying health insurance for the full tax year. If you can afford health insurance but choose not to buy it, you must have a health coverage exemption or pay a fee. (The fee is sometimes called the “penalty,” “fine,” “individual responsibility payment,” or “individual mandate.”)

If you don’t have coverage in 2015, you’ll pay the higher of these two amounts:

  • 2% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a Bronze plan.
  • $325 per person for the year ($162.50 per child under 18). The maximum penalty per family using this method is $975.

If you receive a W2 from DFAS and you have health insurance that meet the minimum essential coverage requirement of the Affordable Care Act, you will receive documentation in January 2016 to file with your 2015 taxes.  Most federally provided healthcare plans (Tricare and FEHB) meet the minimum essential coverage requirement of the Affordable Care Act.

Military members will receive a notification letter from the Defense Manpower Data Center (DMDC) if their SSN or a family members’ SSN needs to be updated in DEERS. It is important to follow the instructions in the letter to ensure information is correctly reported to the IRS.

You will receive an IRS Form 1095-B or 1095-C for all healthcare plans you are enrolled in. This includes Tricare and the Federal Employee Health Benefit plans (available via your myPay account), VA and other plans provided through a government agency or purchased by you for yourself and your family members.

The IRS 1095 series forms include information already provided to the Internal Revenue Service. These forms contain information you need to complete your individual federal income tax return.

What’s a 1095?

The IRS Form 1095 series informs taxpayers of the information provided to the IRS regarding their healthcare coverage during the tax year. This information will be required as taxpayers complete their federal tax return.

  • IRS Form 1095-B (for military retirees and annuitants):  This form provides information you will need to report on your income tax return that you, your spouse and individuals you claim as dependents had qualifying health coverage (referred to as “minimum essential coverage”) for some or all months during the year. Individuals who do not have minimum essential coverage and do not qualify for an exemption may be liable for the individual shared responsibility payment.
  • IRS Form 1095-C (for miltary members and federal civilian employees): This form includes information about the health insurance coverage offered to you by your employer. Form 1095-C, Part II, includes information about the coverage, if any, your employer offered to you and your spouse and dependent(s).

For more information or answers to frequently asked questions, visit this page on the DFAS website.

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