Where do I enter health care coverage information for the Affordable Care Act (ACA)?
Screen HC
If the taxpayer had insurance for the entire year use the HC screen drop list. Links to additional screens that may be needed are provided in the top portion of the screen regarding full-year coverage.
Note: In Drake16 there are two check boxes regarding the option to not compute the Shared Responsibility payment for the taxpayer, these are only available in Drake16. See Related Links below for details on these check boxes.
Data Entry for Dependent AGI information is also available on the HC screen. These entries are available for dependents who are required to file a federal income tax return for the same year.
Screen 95A
Screen 95A is located on the Health Care tab in data entry of the return. On this screen, you will enter the information from the taxpayers' Form 1095-A. Information that is entered on this screen will be used to calculate Form 8962, the Premium Tax Credit (PTC). Any credit due or excess repayment figured on Form 8962 will flow to Form 1040.
Shared policy allocation data entry points are available at the bottom of the 95A screen.
Note: If line 2 of a taxpayer's Form 1095-A displays a Marketplace-assigned policy number that is over 15 characters, you will need to enter only the last 15 characters on screen 95A. This is because the IRS limits this field to 15 characters. The 1095-A itself is supposed to display only the last 15 characters of a policy number that exceeds that limit, according to the Instructions for Form 1095-A for line 2.
My taxpayer received three different 1095-As, each covering a separate portion of the year. When I view the return only the entries made on the first 95A screen appear on Form 8962. How do I include the information from all three forms?
For each 95A screen, enter the policy number in the Marketplace assigned policy number field on line 2. The software requires the policy number to differentiate between 1095-As. EF message 6234 is generated if the field is left blank.
How can I carry insurance premiums to screen 95A?
A checkbox at the bottom of screen 95A. will help you to determine whether premiums are carried to Schedule A and/or SEHID. Be sure to review Note 433, notifying you to confirm that you have not duplicated this information on screen A and the OVERFLOW statement explaining Schedule A, Line 1.
Do not mark this box if:
- the premiums are entered on screen A
- the taxpayer is claiming the SEHI deduction.
Screen 8962
Screen 8962 is located on the Health Care tab in data entry of the return. There are overrides available for lines 4 and 11-23 (flowing from Form 1095-A).
If the taxpayer must complete Part 5: Alternate Calculation for Year of Marriage, these fields are available at the bottom of the 8962 screen for this purpose. A taxpayer can only use the alternative calculation if filing jointly with the new spouse.
If household income is over 400% of the poverty level, PTC is not allowed, however, the taxpayer may be eligible to use the alternative calculation to reduce the amount of APTC that must be repaid.
See Table 4 in the 8962 Instructions for other limitations. EF Messages 6206 and 6231 will generate if entries are made in these fields when they are not eligible for this calculation.
Note: If you moved during the current tax year and you lived in Alaska and/or Hawaii during the year, or you are filing jointly and you and your spouse lived in different states, per the Instructions for Form 8962 line 4, use the table with the higher dollar amounts for your family size.
Note: If the taxpayer is not eligible for the Premium Tax Credit, Form 8962 will not produce, but Worksheet 8962 will still produce to show why the credit was disallowed.
Screen 8965
The 8965 screen is necessary only for taxpayers who did not have “minimum essential coverage” for the entire year. If the taxpayer had full year minimum essential coverage, indicate it on screen HC, not screen 8965.
Due to changes from the TCJA, screen 8965 is not available starting in Drake19 as the penalty for not having minimum essential coverage is zero starting in tax year 2019.
Use screen 8965 to submit exemption information for the ACA. This is where you would enter the Exemption Certificate Number (ECN) issued by the Marketplace. An ECN requires a prior application to the marketplace.
A link to Marketplace exemption applications is provided at the top right of this screen and the bottom half of the 8965 screen contains information for an Affordability Worksheet. This worksheet is used to determine whether coverage for each individual in the taxpayer’s household is unaffordable. The Marketplace Affordability Wks link opens screen PLUC, where you can use the worksheet to prepare entries for the third column on this area of screen 8965. A Bronze and Silver Plan Lookup link is provided on screen PLUC.
Form 8965 is automatically produced when taxpayer’s income falls below their filing threshold. Their household income and filing threshold is shown at the bottom of Wks 89652. The ACANOTES page within the View mode of the return may also provide additional information regarding this form. If the taxpayer's income is above the filing threshold, and no exemptions have been selected, Form 8965 is not produced.
How do I mark the box Full-Year Coverage, on the 1040?
This box is not marked by default. To mark the box, open the HC screen, located on the Health Care tab. At the top, select the option YES - EVERYBODY on this return had minimum essential coverage ... under Required health coverage information.
If a taxpayer has Medicaid, should I check the box on line 61 or would I need to include Form 8965?
According to the Instructions for Form 8965, many Medicaid plans are considered Minimum Essential Coverage (MEC). Check the box that everyone had either full year coverage, or an exemption on the HC screen.
When I complete the health care screens indicating full year coverage, and select Dependent of another on screen 1, the full year coverage box remains checked. IRS instructions say it should not be checked.
Do not complete the health care screens when you select Dependent of another on screen 1; they are not necessary. Leaving the health care screens blank in a return with sufficient income may produce EF message 5049, but selecting Dependent of another clears the error.
What information is available regarding the Affordable Care Act (ACA) from the Department of Labor (DOL)?
The Department of Labor (DOL) provides information on its website regarding the Affordable Care Act (ACA) and its implementation, regulations, and guidance: Affordable Care Act.
This website also provides links to FAQs and related sources, workshops, seminars, studies, and surveys.
Model notice examples for employers who need to provide written notice about health insurance options are here: FAQ on Notice of Coverage Options. The DOL specifically indicates on its website that there is no fine or penalty under the law for failing to provide the notice.
How do I generate a report showing those who have to repay some or all of their Advanced Premium Tax Credit?
To generate a report showing returns that contain a Premium Tax Credit Repayment, do the following:
- Go to Reports > Report Manager > Client Reports > Client Contact > Contact list (individual).
- Click Edit Report.
- Change the Report Title, for example, "1040 with PTC Repayment."
- Locate and add the column ACA PTC Repayment to the selected report columns list.
- Add other columns, if needed.
- Click Next.
- Click Edit Filters.
- Click Add Condition.
- Click Copy on the filter changes pop-up window.
- Enter a Filter Name (for example, PTC).
- Click OK.
- On the Filter Condition Editor window:
- Choose Keyword name as ACA PTC Repayment.
- Choose Comparison: is at least.
- Enter Value: 1 (or whatever amount is needed).
- Click Ok.
- Then click Save.
- Click Save again.
- Click View Report and Continue through the search conditions.
- The report can be printed or exported to Excel.