Do I Need a 1095-B to File My Taxes?

Tax season often brings a host of forms that can confuse many taxpayers. Among these is the 1095-B form, which provides health coverage information. Understanding its role in tax filing is key to staying compliant and avoiding complications.

Information in the 1095-B

The 1095-B form details an individual’s health coverage and is issued by health insurance providers, including employers, government programs, and insurance companies. It reports the type of coverage, the coverage period, and the individuals covered under the policy. This form stems from the Affordable Care Act’s reporting requirements to help taxpayers understand their health insurance status.

The form includes key sections. The first identifies the responsible individual, usually the primary policyholder, listing their name, address, and Social Security Number, along with the coverage provider’s information, such as name, address, and Employer Identification Number (EIN). This verifies the source of the coverage. Another section specifies the months of coverage for the individual and dependents, which is vital for determining compliance with health coverage mandates. While the federal mandate penalty was removed in 2019, states like California and New Jersey still enforce their own requirements and penalties for non-compliance.

When It’s Needed for Filing

The necessity of the 1095-B form for tax filing depends on individual circumstances. While it is not required to be submitted with federal tax returns, it confirms health coverage status and can be useful when completing IRS Form 8962 to reconcile advance Premium Tax Credit payments. Though the federal penalty for lacking coverage no longer applies, several states with their own mandates, such as California and Massachusetts, require proof of coverage.

For residents of states with health coverage mandates, the 1095-B is crucial to avoid penalties. For example, California imposes a penalty of $850 per adult or 2.5% of annual income for those without minimum essential coverage. Having the form simplifies proving compliance with such state laws.

Taxpayers who received advance premium tax credits from the Health Insurance Marketplace can use the 1095-B to ensure their tax return aligns with IRS records. Discrepancies can lead to delays in processing, adjustments to refunds, or increased tax liabilities. While not mandatory for federal taxes, the form serves as a reference to prevent issues.

Effects on Refund or Tax Liability

Though the 1095-B does not directly influence federal tax filings, it can indirectly affect refunds or liabilities. Reporting health coverage incorrectly may result in adjustments to tax returns, altering refunds or balances owed. Accurate reporting is especially important when reconciling discrepancies with IRS records.

In states with health coverage mandates, such as New Jersey, failure to provide proof of coverage can lead to penalties that directly impact tax liabilities. For instance, New Jersey’s Shared Responsibility Payment can reach up to $2,085 per household, depending on income and family size. Retaining the 1095-B helps substantiate compliance and avoid financial penalties.

For those with advance Premium Tax Credit payments, reconciling these amounts against actual income is critical. Errors can lead to unexpected tax bills or reduced refunds. The 1095-B provides reliable coverage details, aiding in the accurate completion of Form 8962, ensuring taxpayers repay excess credits and receive correct refunds or credits.

Handling Missing or Delayed Forms

Missing or delayed 1095-B forms can complicate tax filing, but proactive steps can help minimize disruptions. Contacting the health coverage provider to request a digital copy or estimated delivery timeline is a practical first step. Personal records, like insurance cards or policy statements, can temporarily verify coverage.

The IRS advises taxpayers not to delay filing due to a missing 1095-B. Instead, alternative documentation can be used to estimate coverage periods, helping avoid penalties or interest from late filing. Documenting all correspondence with insurers can serve as evidence of due diligence in case of future inquiries.