You’ll Need These Forms When You File Your 2020 Tax Return
Filed under: Health Insurance
Jonathan Nolan, JPN Insurance
As Spring approaches, so does tax season. Most of you are gathering your documents and preparing to file your 2020 federal income tax return, along with your state return. But before you get started, we wanted to remind you to watch your mail for two important forms that you will need to complete your federal taxes: Forms 1095-A and 1095-B.
Not only do you need to document your earnings for the year; you must also provide proof of health insurance coverage. The Affordable Care Act already required that most Americans maintain healthcare coverage for each tax year, and now the state of California also imposes an Individual Mandate. While the federal penalty for failing to maintain coverage is currently set at zero, the state law does impose a fee upon those who did not enroll in a policy. Therefore, it is vitally important to retain proof of your health insurance coverage for the year, which is provided to you by your health insurance company. They will send you Form 1095-B in the mail.
In addition, those who receive a subsidy to help with the cost of health insurance premiums also need to reconcile that amount. Each year, subsidies are estimated based upon expected earnings, but underpayments and overpayments can occur. You must use Form 1095, which you will also receive in the mail, to demonstrate the correct amount of your subsidy. You should also receive this form in the mail soon, if you have not already.
Covered California will send Form FTB 3895 California Health Insurance Marketplace Statement to all enrolled members. It is used to fill out Form FTB 3849, Premium Assistance Subsidy, as part of your state tax return. Use the California Franchise Tax Board forms finder to view these forms.
You are not required to submit these forms with your tax returns, but you must use them to correctly compute your taxes. You should also keep these forms in your files, so that you can provide proof in the event your return is ever audited.
If you need more help understanding which forms are required, contact Jonathan Nolan of JPN Insurance Services. (951) 443-9925 or jonathan@jpninsurance.com
