Thanks Frank/Robin/Kimfor that great opening. · child,limited to $2,085 for 2016) Promote Open enrollment –The2017 open enrollment period is Nov 1, 2016 to January 31, 2017 –thisis

Thanks Frank/Robin/Kim for that great opening.

We appreciate each and everyone of you for taking time out of your busy schedules to attend the Affordable Care Act (ACA) Application training. This training will strengthen your understanding of the Intake/Interview and Quality Review Process as it relates to different ACA components.

We plan to share all PowerPoints, scenarios and capture the Q&A session at the end of this training. To further assist you in the review process, we have created a Fact Sheet with more detailed information. Upon approval we will share it with you. We ask that you share all of this information with your National and local Partners.

It is important to be knowledgeable of the ACA Tax Law. Here are some sites that may help refresh your memory: IRS ACA Page: https://www.irs.gov/affordable‐care‐act The ACA IRWeb page: http://irweb.irs.gov/AboutIRS/bu/aca/default.aspx and the HHS web site: https://www.healthcare.gov/

At the end of this presentation we will take questions through the chat feature on Lyncs/Webcaster. We ask that you only submit questions pertaining to this presentation.

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http:https://www.healthcare.govhttp://irweb.irs.gov/AboutIRS/bu/aca/default.aspxhttps://www.irs.gov/affordable-care-act

We have a jammed packed agenda. Our agenda includes:

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Now let’s look at what’s new for 2016.

We have some new tools –

We made a change to the F13614C – We added the Ethics statement and the Voltax email; The singlefiling status was removed and changed to unmarried – this will allow the tax preparer to confirm theclients correct filing status

We updated the 4012 – with TaxSlayer screen shots, clearer instructions on claiming the affordabilityexemption, more information about the Premium Tax Credit, including handling special situations andlarge Advance Payments of Premium Tax Credit (APTC) repayments limits

Based on your feedback we updated the Publication 4491 with more realistic ACA examples. Our New Software is Taxslayer – we wll discuss this in more detail later

Beginning 2017 the Form 1095‐B/C will be issued annually by January 31 ‐ This will help improve on more accurate returns.

The Shared Responsibility Payment (SRP) increase this year is 2.5% of income or the flat dollar amount ($695 per adult and $347.50 per child, limited to $2,085 for 2016)

Beginning for TY2016, the Marketplace will no longer be granting exemptions for members of federally recognized Indian tribes. Lifetime ECN’s granted in 2014 or 2015 are still valid (they are considered ever green). These exemptions can still be claimed directly from the IRS on Part 3 of the Form 8965.

We have four new coverage exemptions this year ‐ Exemption Code H – Member of a tax household born, adopted or died during the year;

And three new Marketplace exemptions: • Coverage considered unaffordable based on projected income• Unable to renew existing coverage• Certain Medicaid programs that are not minimum essenital coverage

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Our biggest change for TY 2016 is using TaxSlayer ‐ Some highlights include:

TaxSlayer has simpler dialogue boxes. It’s interview base methodology guides you through the interview process – for example ‐ if you indicate the TP had insurance all year, you are never asked to check the boxes for each month of coverage. If you indicate that the taxpayer bought Marketplace insurance, you’re prompted to enter the 1095‐A info – but if you answer NO to that question, it doesn’t ask about the 1095‐A.

If you receive a F1095‐A, TaxSlayer first asks if all F1095‐A amounts were the same for Jan – Dec, with all months covered. If you answer YES, then TS prompts you only for the annual amounts. If you answer no, TS prompts you to enter the monthly amounts, with no place to mistakenly enter the annual amounts. This was a common error last year – the volunteer would faithfully transcribe both the annual totals and monthly amounts. That error can’t happen this year.

Possible Flaws – You can’t strictly rely on software for the correct answer – Rely more on the interview with the taxpayer to get the correct answer.

If the taxpayer has an exemption granted by the Marketplace, the taxpayer should be able to provide you with the Exemption Certificate Number (ECN). In the software, if you answer Yes to this question, you’re prompted to enter the ECN. If an individual has applied for a Marketplace exemption but has not received it enter “pending” in the ECN field. We have recommeded a change to the TS software to add “applied for.”

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If you received Marketplace Insurance, you have a chance in the TS software to enter MAGI for dependents with a filing requirement. The software never asks you about dependents’ MAGI for the SRP – (This issue has been elevated, but it’s not correct now.)

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Here are some important things you need to know:

All 1095’s will be issued annually by January 31

Stress to taxpayers the importance of filing for a Marketplace exeption early

The SRP is 2.5 % of income or the flat dollar amount ($695 per adult and $347.50 per child, limited to $2,085 for 2016)

Promote Open enrollment – The 2017 open enrollment period is Nov 1, 2016 to January 31, 2017 – this is the time for taxpayers to make changes to their insurance coverage.

Remind taxpayers any time throughout the year they may qualify for a special enrollment periods (i.e. married; divorced; new baby; change income; etc) – refer people to Marketplace or healthcare.gov

It is important to remember all Forms 1095A’s must be reconciled on Form 8962. *Some taxpayers may come into tax sites requesting to file or amend prior year taxreturns.*

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http:healthcare.gov

Now lets look at some of the Lesson Learned from QSS results and tax return reviews.

Some SRP Common Errors ‐ taxpayers were eligible for an exemption that they did not claim and made an SRP that they did not owe: Gross or Household income below the filing threshold Not lawfully present (i.e. Deferred Action for Childhood Arrivals (DACA) or Development,

Relief, and Education for Alien Minors (Dream). Short coverage gaps of up to 2 months

Miscalculation SRP: Adding in dependent MAGI when it was not required (e.g. must have income above the

filing threshold) Not limiting the SRP calculation to:

The National Average Bronze plan limit The correct percentage of income (2.5% for 2016) or The maximum flat dollar amount (3X the adult rate of $695 = $2085)

Dependents who did not claim their own personal exemption should not report an SRPon their return, even if they did not have coverage. The person claiming their exemptionis responsible for reporting coverage, exemptions, or an SRP on their behalf.

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Now lets look at some PTC Common Errors ‐

Did not reconcile APTC – must use Form 8962, Part 2, and reconcile any APTC even if your client otherwise had no obligation to file a tax return.

Claimed PTC but failed to attach Form 8962 – If your clients claim PTC they must file Form 8962

If your clients were required to reconcile advance payments of the premium tax credit but failed to do so when they filed, they probably received a 12C ‐ premium tax credit ‐ letter from the IRS.

Form 1095‐A data not correctly reported ‐ on Form 8962, ‐ Taxpayers did not transcribe information to the Form 8962 accurately

Transposed digits – amounts not entered correctly

Miscalculated Monthly PTC Allowed – on Form 8962, Part 2, (Column E) Taxpayers did not accurately calculate the the monthly PTC

Miscalculated Repayment Amount of Excess APTC – on Form 8962, Part 3 ‐ Be mindful of the calculation and the repayment caps.

In addition – if the Marketplace issued corrected Form 1095As , it may affect your client’s return. If the return has not yet been filed, you should use the new form when completing the tax return.

Compare the corrected Form 1095‐A to the original form to determine whether the Form 1095A change will require the client to file an amended return.

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Lets review some basic MEC info

Recap top 3 bullets

More detail about MEC is in the 4012 on page ACA‐4

MEC does not include coverage providing only limited benefits, such as: Stand‐alone vision and dental insurance Workers' compensation Accident or disability income insurance Medicaid plans that provide limited coverage such as only family planning services, or

only treatment of emergency medical conditions.

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Marketplace (federal or state) must provide Form 1095‐A, annually by January 31 If you did not receive Form 1095A ‐ contact the Marketplace or go to your online

Marketplace account to obtain any Forms 1095A. If the taxpayer does not have Form(s) 1095‐A, the volunteer cannot prepare the tax return The taxpayer may have multiple Forms 1095A – Go to the 4012 and F8962 Instructions for

guiduance If we have a 1095A all people listed on 1095A must be on the tax return or it is out of scope

for VITA/TCE. On the 1095A Part II, – always review the coverage dates – Columns D and E shows the start

and end date of coverage. If coverage is not for the full twelve months ask questions andnotate the responses on F13614C.

1095B (annually by Jan 31) – Issued by Insurance Company or insurance providers; that includes Medicare and Medicaid

1095C (annually by Jan 31) – issued by large employers (50 or more employees)

Now I will share some examples of Reasonable Due Diligience – Example one ‐ Taxpayer comes in without his 1095B – He shows you his Military ID saying he is active duty Military with coverage all year. The tax preparer should notate the F13614C – Coverage all Year Military

Example two ‐ Taxpayer said they had Marketplace insurance all year – the 1095A Part II should

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show coverage for 12 months. If not, the tax preparer should ask questions to clarify the missing months and make the appropriate notations on the F13616C.

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Since 2014, everyone claimed on a tax return must: • Have qualifying health care coverage (called minimum essential coverage, or MEC); or• Claim an exemption from the coverage requirement; or• Make a shared responsibility payment

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Approximately 90% of taxpayers will have a health insurance coverage (MEC)–

Based on how you answer the dialogue boxes in Taxslayer this it will automatically check the box.

If the box is not checked you should see a dollar amount on line 61 ‐1040; Line 38 ‐1040A or Line 11 of 1040EZ.

If no box checked and no amount on the line you should look for the Form 8965 (Health Coverage Exemption).

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Let’s review the Form 8965 – only one Form 8965 per household. It should include applicable exemption claims for all individuals or a household coverage exemption.

Exemptions can be for an individual or for the household and they can be granted by the Marketplace or requested from IRS.

Part 1 ‐Marketplace Granted Coverage Exemption for Individuals If you or another member of your tax household has been granted a coverage exemption for one

or more months from the Marketplace complete Part 1 and enter the Exemption Certificate Number (ECN) number or

If you have an application for a coverage exemption for one or more months pending with theMarketplace, complete Part I and enter pending to claim the exemptions.

Part 2 ‐ Coverage Exemptions Claimed on Your Return for your Household To claim a coverage exemption on behalf of your tax household because your household income or your gross income is less than your filing threshold.

Part 3 ‐ Coverage Exemptions Claimed on Your Return for Individuals To claim a coverage exemption on your tax return for yourself or another member of your tax household.

Remember you can use multilple exemption codes to cover a 12 month period. For example = a taxpayer was homeless 6 months Jan – June; he had no coverage July and Aug; and he had

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Medicaid for Sept. – Dec. For the first six months the taxpayer can apply to the Marketplace for a Hardship Exemption; for July and Aug the taxpayer can claim exemption Code B – (less than 3 months); for Sept. – Dec. the taxpayer had MEC coverage.

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Next, we’ll get into how the SRP is calculated. In general, the annual payment amount is the greater of two amounts: a percentage of your client’s household income or a flat dollar amount.

Recap top portion of slide –

Looking at the slide from TY2014 to the present we see how the SRP has increased

Recap

After 2016, the amounts may increase with the cost‐of living adjustment. These figures are halved if the individual without coverage is under 18 ($347.50) as of the beginning of the month.

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The majority of eligible individual purchasing insurance through the Marketplace choose to have advance payments of the estimated credit paid directly to the insurance company. If they don’t choose APTC, they can choose to pay all the premiums and get the full benefit of the credit when filing the tax return.

The premium tax credit can reduce a person’s federal tax liability and lower a balance due, or it may create or increase the amount of a refund. Because the premium tax credit is refundable, an individual who has little or no income tax liability can still receive the full benefit of the credit as a refund.

PTC is based on actual information (household income, family size, etc.). APTC is based on projected information.

PTC is claimed on tax return using Form 8962. PTC and APTC must be reconciled on tax return using Form 8962 and the Form 1095A from the Marketplace. Reconciliation results in either a refundable credit or excess APTC.

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Generally, to be eligible for a premium tax credit, the taxpayer’s household income must be at least 100% of the FPL. However, individuals whose household incomes are estimated by the Marketplace to be 100% or higher and who receive the benefit of advance payments of the premium tax credit but then have household income that falls below 100% of the FPL for the year, typically because of a change in circumstances, will still be allowed the premium tax credit as long as they meet the other requirements for getting the credit.

MFS ‐ A married individual cannot get a premium tax credit if he or she uses the Married Filing Separately status unless the individual is a victim of domestic abuse or spousal abandonment and cannot file a joint return because of the abuse or abandonment. More information about the use of MFS status is available on the IRS website.

Also, if they qualify, married individuals may claim the premium tax credit using the Head of Household filing status ‐ because for tax purposes they are treated as unmarried.

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Remind your clients that there are several important considerations involved with the choice to receive the benefit of advance credit payments: Advance credit payments are optional. Advance credit payments must be reconciled with the actual credit allowed when they

file their tax return Differences between advance credit payments and the actual premium tax credit are

allowed Changes in circumstance can affect the differences. They must file a tax return to reconcile these differences and to claim the credit even if

not otherwise required to file.

Taxpayers will complete the Form 8962, Premium Tax Credit, to reconcile advance payments of PTC and to claim the PTC. If you find during the reconciliation process that the actual premium tax credit is less than advance credit payments, the difference, subject to certain caps, is additional tax that will reduce your client’s refund or add to the balance due.

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Reporting changes to the Marketplace promptly will allow the Marketplace to adjust your client’s advance credit payments, helping prevent large differences between the amount of advance payments of the premium tax credit and the premium tax credit allowed.

This adjustment will help your client avoid getting a smaller refund or owing money that he or she did not expect to owe on the federal tax return.

Individuals purchasing health insurance at the Marketplace should report changes to the Marketplace either online or by phone to adjust the amount of their advance credit payments.

Now lets look at some examples of major changes in circumstance (family size or filing status; increase/decrease in household income; gain/loss health care coverage or eligibility and moving to another address. These changes may open the door for a Marketplace special enrollment period that permits health care plan changes throughout the year. In most cases, the special enrollment period for Marketplace coverage is open for 60 days from the date of the life event.

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Your client’s Marketplace must provide Form 1095‐A, by January 31

An individual who does not receive the Form 1095‐A from a Marketplace should contact the Marketplace or go into their online Marketplace account. The IRS does not issue and cannot provide clients with a copy.

Taxpayer will receive the F1095A from the Marketplace. Complete Form 8962, to claim the premium tax credit and reconcile advance credit payments with the premium tax credit your client is eligible to claim on his or her return. The F8962 can be filed with 1040, 1040A and 1040NR.

If the taxpayer enrolled in coverage through the Marketplace but didn’t get the benefit of advance credit payments during the year, he or she will get all of the benefit of the premium tax credit when claiming the credit on his or her tax return.

Now I will turn it over to Therese to cover the the Intake/Interview Process

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Now that Amelia has refreshed our ACA knowledge, let’s take a look at the intake/interview process as it relates to ACA.

All entries on Form 13614‐C MUST BE COMPLETE. The volunteer MUST have used due diligence by asking the necessary questions to arrive at the correct tax computation and notating the responses provided by the taxpayer. Notes should be added to the intake/interview sheet to ensure all information needed for an accurate return was obtained and the quality reviewer has all the information needed to ensure accuracy. Examples of notes that should be added to the intake/interview sheet for ACA include the name of insurance and any verbally provided information or clarifying information.

Notes should be added to Form 13614‐C to ensure all information needed for an accurate return was obtained and the quality reviewer has all the information needed to ensure accuracy. (Example: name of insurance, any verbally provided information, clarifying information, etc.) Notes should be added to Form 13614‐C for any oral statements provided by the taxpayer.

The information provided on Form 13614‐C, the tax return, and source documents should all correlate.

Out of scope should be identified early in the intake process.

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As you know,

Part I contains basic taxpayer information: Their name, address, etc.

For ACA, You need to look at how they answered: • Whether they are a US Citizen• Whether they are a full‐time student• And whether anyone can claim them on their tax return

Remember that for ACA, individuals who are not here lawfully cannot take the premium tax credit Full‐time students may be a dependent on someone else’s tax return‐the taxpayer who is claiming the deduction generally needs to address ACA.

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Part II covers marital status and dependents.

Look to see if the taxpayers married during 2016. If they did and one or both of the taxpayers received their MEC through the Marketplace, the taxpayers have a choice for the Premium Tax Credit. If they opt for the alternative calculation, the return is out of scope.

You also need to know if the taxpayer is filing using Married Filing Separate. You would need to look at the return to determine the filing status used.

The dependents section will list any potential dependent and, possibly provide information indicating the members of the tax household or tax family. This is especially important for individuals who received their MEC from the Marketplace.

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As we continue through Form 13614‐C, Parts 3 and 4 cover income and expenses.

Look to see if there are any Form W‐2. If so, did the employer indicate any health coverage in Box 12. Code DD indicates health care coverage.

If the taxpayer indicates they had self employment income, check if they included any MEC coverage as part of their self employment expenses. Remember that the self‐employed health insurance deduction is out of scope.

Part 5, Life events does not impact ACA.

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Part 6 is the section we focus the most on for ACA.

The first question tells us if the taxpayer has health care coverage. We need to determine if the coverage is MEC.

The second question helps us with that as it asks if the taxpayer has one or more Forms 1095‐B and/or 1095‐C. If they indicate they have Form 1095‐C, the correlating W‐2 should have code DD in box 12. Be careful if they have a Form 1095‐B and are self‐employed that you stay within scope.

The third question asks about Marketplace coverage. If they answer yes, you must have Form 1095‐A to complete the review. The volunteer cannot prepare the return without all Forms 1095‐A. Keep in mind, the taxpayer may have more than one Form 1095‐A. If the taxpayer answers yes to this question, look at how they responded to question 3a. This should indicate if the taxpayer received advanced payments from the Marketplace. If the taxpayer received advanced payments, you need to reconcile the advance payments on the tax return.

The fourth question asks if they have an exemption granted by the marketplace. If they answered yes, as k for their Exemption Certification Number or ECN. This question does not address exemptions granted by the IRS. These are requested with the tax return on Form 8965.

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The gray section of Part 6 will identify: • If the taxpayer had MEC for the entire year • If the taxpayer did not have MEC during the year • If the taxpayer had an exemption for the year • If the taxpayer had part‐ year MEC or part year exemption, the months the taxpayer had in

insurance and/or an exemption

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Lastly, Parts 7 and 8 provide space for any preparer (or quality reviewer) notes which should clarify information reflected on Form 13614‐C.

You should be able to complete a comprehensive quality review without having any additional questions based on what is provided on Form 13614‐C and the source documents used to prepare the tax return.

Remember, the source documents and Form 13614‐C should correlate with what is reported on the tax return. You need to question any discrepancies.

Now, lets look at preparing the tax return.

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KRIS STARTS HERE

During this section, we’re going to talk about the information you need to actually prepare the return. This same information is also in the ACA section of Pub 4012, and there are TaxSlayer screen shots in that section, illustrating how to enter information into the Health Care section of the software.

ACA issues include the Shared Responsibility Payment , Exemptions and the Premium Tax Credit. Returns at the volunteer site might require us to address just one of these issues, or a combination of all three. And most returns will simply need us to indicate that everyone on the return had full coverage all year.

Reference: Handout, Pub 4012 ACA Section, Instructions for Forms 1040, 8962, and 8965

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Taxpayers may have several different documents that can help you establish if they had Minimum Essential Coverage, and for what months.

The F1095‐A from the Marketplace is a required form if the taxpayer received Advance Payment of Premium Tax Credit – we need that information to complete Form 8962 and reconcile their credit. If the taxpayer has multiple Forms 1095‐A, or doesn’t include the SLCSP for every month, you should refer to the Form 8962 instructions when completing the return.

Forms 1095‐B and 1095‐C are not required, and you will need to rely on your interview with the taxpayer to determine their coverage, and whether they are eligible for an exemption.

But if the taxpayer does bring in F1095‐B or C, it will help show which family members had MEC, and for which months. If the form shows that the taxpayer had an offer of employer insurance, this can help you determine if the TP is eligible for the Affordability Exemption.

If the taxpayer tells you they had coverage, but you don’t see a Form 1095, you might want to probe a little to be sure the taxpayer isn’t eligible for Premium Tax Credit. If so, they’ll need to get their F1095 –A information.

Reference: Form 8962 and Form 8965 instructions, Pub 4012 ACA Section

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TaxSlayer has a Health Insurance section, and there are specific forms to be completed to claim an exemption or the PTC – but, as Therese pointed out, many other parts of the tax return have an impact on ACA issues. As you’re interviewing the taxpayer, or doing QR, you need to make sure these are consistent.

For example, do the individuals listed on the tax return match up with the people listed on Form 1095‐A? If not, the return may be out of scope.

Does the taxpayer have a qualifying child that is being claimed as a dependent by the other parent? The person claiming the child’s exemption is the person responsible for any SRP for if that child.

If the taxpayer is Married Filing Separate and had Marketplace insurance, you may have to ask some additional questions to see if the taxpayer is eligible for the PTC. If someone is using an ITIN, that may indicate they’re not lawfully present – they may eligible for a exemption if they didn’t have MEC all year.

As you explore these paths in your interview, be sure to document them on the intake sheet, so the QR person knows that you’ve already covered this and what you learned.

Reference: Handout, Form 8962 and Form 8965 instructions

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Income can affect all of the ACA issues.

If the taxpayer needs an exemption – ask yourself if the gross income OR household income is below the filing threshold. Remember that gross income might be different from HHI for the return (for example, a child’s MAGI is not included in gross income, but it is part of the HHI if the child has enough income to be required to file.) [Pub 4012, ACA‐8]

And all income reported on the return affects household income, which will affect the Shared Responsibility payment or the Premium Tax Credit.

Reference: Handout, Form 8962 and Form 8965 instructions, Pub 4012 ACA Section

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Adjustments affect AGI, which in turn affect MAGI and household income.

If your taxpayer is affected by one of the ACA provisions, increasing adjustments could decrease MAGI and household income. Should you consider the Tuition and Fees Adjustment, instead of the Lifetime Learning Credit?

And don’t forget to mention it on the intake sheet if you’ve already considered which was better for your taxpayer.

Reference: Handout, Form 8962 and Form 8965 instructions

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As you’re reviewing the tax return, you want to make sure it passes the logic test. This is true for preparers as well as the quality reviewers.

If the taxpayer needs to repay “excess advance premium tax credit”, it will show in the Tax section of the return (on the Form 1040, it’s line 46.) Does the amount seem consistent with the taxpayer’s situation?

Reference: Handout, Form 8962 instructions

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If an individual in the tax family had even one month with no MEC and no exemption, then the SRP will be calculated in the Other Taxes section (line 61 of the Form 1040.)

If everyone had MEC for every month, the little checkbox for “Full Year Coverage” will be checked. One way that TaxSlayer is different from our old software is that it only checks this box if the tax family had MEC for every month. If a family member is claiming a coverage exemption for some part of the year, the “Full Coverage” box is correctly left unchecked, but the Shared Responsibility Payment will be $0 if there is MEC or an exemption for every month for every individual.

When checking your return, ask yourself if the SRP amount is consistent with what you know about the taxpayer. Does the intake sheet indicate a gap in coverage that wasn’t covered by an exemption? If so, you should be seeing an SRP on the return.

If there is an SRP on the return, did the volunteer consider any exemptions? Noting this on the intake sheet will keep the QR person from having to cover the same ground again with the taxpayer.


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We didn’t want to make you watch us enter a whole tax return in TaxSlayer, but I’d like to remind you of a few ways the Health Insurance section of TaxSlayer is different than what we used in the past.

The software will first ask if the taxpayer or a family member had insurance at any time. Depending on your answer to that question, it will ask if you had Marketplace insurance.

Only taxpayers who purchased Marketplace insurance are eligible for the Premium Tax Credit. The second screen of TaxSlayer’s Health Insurance section asks “Did you purchase health insurance via HealthCare.gov or a State Marketplace? “ If you answer no, the software won’t ask you to address Premium Tax Credit again in the return.

If you answer YES, then later you’ll be prompted to enter the information from the taxpayer’s Form 1095‐A.

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http:HealthCare.gov

Then it’s going to ask you to verify the taxpayer’s household members. This screen is something new for us, and we should almost never need it at the volunteer site. But since it’s new, we want to make sure volunteers don’t use it when they should not.

Remember, for the Shared Responsibility Payment and coverage exemptions, your tax household generally includes you, your spouse (if filing a joint return), and any individual you claim as a dependent on your tax return. It also generally includes each individual you can, but don't, claim as a dependent on your tax return. Your tax household doesn't include someone you don't claim because the dependent is properly claimed on another taxpayer's return or can be claimed by a taxpayer with higher priority under the tiebreaker rules described in Pub. 501. [Instructions for Form 8965]

This top screen allows us to enter a person that belongs in the “tax household” but is not listed on the tax return.

At a volunteer site, we should almost never have to add a new tax family member. Just about the only in‐scope situation that we’re likely to see would be a parent that COULD have claimed a dependent’s exemption, but chose not to, in order to allow the student to claim an education benefit. The student can’t properly claim their own exemption in this case, and the student’s health insurance situation must be explained on the parent’s return.

TaxSlayer will also ask whether your entire household was insured all year. If you answer YES to this question, the software won’t prompt you for information about exemptions. If

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you answer NO on this screen, you’ll enter information about exemptions later.

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[The upper screenshot is from 11/2/16, after the verbiage was updated by TaxSlayer— note was added about answering NO if HHI is below filing threshold]

The software asks if the taxpayer qualifies for an exemption. You should indicate YES if the taxpayer is eligible for any kind of exemption, whether granted by the Marketplace or IRS.

If taxpayer might be eligible for the Affordability Exemption, you’ll need to use the worksheets in the Form 8965 instructions to determine if the taxpayer’s “required contribution” is more than 8.13% of household income. TaxSlayer provides a link to the Marketplace Affordability tool on healthcare.gov.

New for 2016, the income‐based exemptions have been combined into one line. These are the exemptions indicated in Part II (Line 7) of Form 8965. If the taxpayer’s household income is below the filing threshold OR if their gross income is below the filing threshold, this box can be checked. Depending on the taxpayer, their gross income may be higher or lower than their HHI.

The software asks you only “Are you claiming an exemption because your gross income is below the filing threshold?” The software will automatically allow the Line 7 exemption if the HHI is below the filing threshold (see the new note in the question) [BUT it’s not working quite right (as of 10/20/2016) because they don’t ask for dependents MAGI so the software may not be working from the correct HHI.]

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http:healthcare.gov

TaxSlayer doesn’t automatically allow the Line 7 exemption for gross income below the filing threshold ‐ you’ll have to check the box.

Reference: Handout, Form 8965 instructions, Pub 4012 ACA Section

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[Screenshot is from 11/2/16, after verbiage change to include “or going to apply for an exemption.”]

When entering exemptions in TaxSlayer, you pick the individual for each exemption from a drop down menu. That means volunteers are less likely to make a typo on the name or SSN – but they still have to be careful to pick the right person

If the taxpayer has an exemption granted by the Marketplace, the taxpayer should be able to provide you with the Exemption Certificate Number (or ECN). In the software, if you answer Yes to this question, you’re prompted to enter the ECN, along with the months it covers. If an individual has applied for a Marketplace exemption but hasn’t yet received their ECN, enter “pending” in that field. Be sure to let the taxpayer know that if their exemption is not approved, they’ll need to amend the return.

If the taxpayer is eligible for an IRS‐granted exemption, you pick the exemption type from a list of descriptions – volunteers won’t have to enter the letter code for the exemption . If you need help determining whether the taxpayer is eligible for an exemption, use the table on page ACA‐7 in Pub 4012. TaxSlayer also provides a link to a health coverage exemption tool on healthcare.gov on the first exemption screen.

Check that the months for each exemption were entered correctly.

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http:healthcare.gov


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Once you’ve selected the exemption type, you’ll enter the months covered by the exemption. If you check the full, TaxSlayer will hide the month boxes.

When you complete the input for an exemption, you’ll see a summary screen showing the name and the exemption type that’s been input so far. Click on ADD if you need to enter another exemption for the same person, or an exemption for another person.

You can combine exemptions for an individual, if that’s needed to explain all gaps in coverage. You’ll see this in an example later. But if the taxpayer is eligible for an exemption that covers the entire year – you can just report that one, and not worry about finding other exemptions. For example, if the taxpayer is a tribal member, and has several gaps in coverage over the course of the year – you can just enter the exemption for tribal member. That will cover any time the individual did not have MEC.


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If you indicated that the taxpayer received Marketplace insurance, TaxSlayer will prompt you with questions about the Advance Payment of Premium Tax Credit . You’ll enter the amounts from the taxpayer’s Form 1095‐A. If the taxpayer’s form includes amounts for all 12 months, and the amounts are the same for every month, then you can enter the annual totals [top screen]. Otherwise, you enter the monthly amounts [bottom screen]. TaxSlayer won’t let you enter both.

When reviewing the tax return, be sure that the F1095‐A information has been correctly transcribed. It’s easy to make a typo, especially if you’re entering monthly amounts. TaxSlayer shows only the columns that need to be input in Form 8962, which may help reduce input errors.

If the taxpayer has more than one Form 1095‐A, or if information seems to be missing, see the Form 8962 instructions to determine the correct figures to enter. You may need to use the tool on www.healthcare gov [https://www.healthcare.gov/tax‐tool/] to look up the correct Second Lowest Cost Silver Plan. Be sure to note this on the intake sheet.


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https://www.healthcare.gov/tax-toolwww.healthcare

If the taxpayer’s actual Premium Tax Credit is LESS than his Advanced PTC, the excess amount must be repaid. However, the repayment may be subject to limitations, as long as the taxpayer’s Household Income is below 401% of the federal poverty line.

If the Household income is greater than 400% of FPL, the entire Advanced PTC must be repaid. The repayment appears as an “excess premium tax credit” in the tax section of the return [line 46 of Form 1040.]

You won’t see this calculation while you’re inputting information in the tax return, but all the required forms, as well as the SRP worksheet, will be there when you open the print file. This will help as you review the return for accuracy.


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If the taxpayer’s Premium Tax Credit is greater than the Advanced Premium Tax Credit shown on the Form 1095‐A, the taxpayer’s “net premium tax credit” will be shown as a payment on the return [on the Form 1040, line 69] – increasing a refund, or reducing the balance due.

When reviewing the return, ask yourself: Does the amount of net PTC or excess PTC seem consistent with the taxpayer’s situation?

Now, let’s use some examples to put all this into practice. Amelia Dalton will give us the first demonstration. [switch to Amelia]


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Thanks Kris,

Now we will take a look at three different scenarios. All the scenarios are attached to this presentation as a handout, along with any supporting documentation (i.e. Form 13614C, W2’s, F1095A’s and the completed 2015 tax return).

Let’s look recap Scenario 1 (Amber Aspen).

Amber is single with no dependents; Amber had MEC insurance for seven months (January – July). Amber had no insurance from Aug. – Oct. His electricity was disconected Oct. – Dec.

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First lets look at Amber’s F13614C. Is it complete? No

In this example the taxpayer did not answer all the questions. The questions missed were: Are you a US Citizen? And Can anyone claim you or your souse on the tax return? These are important questions that could affect the accuracy of the tax return.

The tax preparer should mark and notate any missing information in the notes section of the F13614C. This will assist the quality reviewer in ensuring we complete an accurate return.

Now let’s look at some sample screen shots from TaxSlayer.

Taxslayer software ask Was the entire houshold insured for 12 months of 2015? Yes or No ‐ The answer in this example is No

Enter the number of months insured in Taxslayer ‐ 7 months

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This TaxSlayer screen shot shows how to enter a Health Insurance Exemption

Taxslayer ask Do you have a market‐issued certificate for this exemption? Yes or No

We had requested a change to the software to include “or going to apply for an exemption” and that change has just been applied.

In this example Amber had no electricity Oct. – Dec. Amber could apply to Marketplace for the Hardship Exemption. We would enter “pending” on the line Exemption Certificate Number (ECN).

We would then enter the months we are applying for the hardship exemption into TS. In this case it is Oct.‐ Dec. We would advice the taxpayer to submit the required paperwork to the Marketplace.

The tax preparer should make a note on the F13614C Taxpayer will file for a exemption with the Marketplace.

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The next screen shows

How TS software looks when entering another Health Insurance Exemption. Amber qualifies for exemption code B ‐ Short Coverage Gap – less than 3 months. In this example you would select short coverage gap in the drop down menu. It is important to remember you will see the narratives not the Exemption Code letter in the drop down menu.

Recapping Scenario 1 Amber would not have a SRP. Per his return. Amber had coverage for the full 12 month period. He had seven months with MEC, two months with short coverage gap and three months applying for the hardship exemption with the Marketplace.

In the notes section of the F13614C it should incude all the notated return details.

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KRIS Example: No filing requirement except for APTC (QUICKLY RECOUNT FACTS).

All the scenarios are attached to this presentation as a handout, along with intake sheets, source documents, and completed 2015 returns.

As we interview Sally, making notes on the intake sheet as we go, we learn that she had Medicare for the last part of the year, but Marketplace insurance for the first 7 months. If we were to compare her income to the Filing Requirement Thresholds in Pub 4012, we would see that her gross income is below the filing [$11,850 for 2015, since Sally would have been 65 at the end of the year], since none of her social security would be taxable. But we also see that she received the Advance Payment of Premium Tax Credit. [Chart C – Other Situations When You Must File on page A‐3 of Pub 4012]

Is Sally required to file a tax return? YES

She is required to file because she received the APTC. She must file a return with Form 8962 to reconcile her Premium Tax Credit.

Since the Advanced PTC is based on Sally’s estimated income when she signed up for the

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Marketplace insurance, she needs to complete the tax return and file Form 8962 to see how much Premium Tax Credit she’s really entitled to, based on her actual household income for the year.

Sally has coverage all year in our example. But if she did have some months without coverage, she would have been eligible for an exemption because her household income was below the filing threshold (from line 7 of Form 8965.) However, she still would have been required to file, and reconcile the PTC for the months she had Marketplace coverage.

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[According to the Washington Health Benefit web tool, the second lowest cost silver plan for King County would be $590.]

Now we need to enter the information from Sally’s Form 1095‐A. Once we answer YES to the question about receiving a 1095‐A, the screen will prompt us for more information. If you answer “YES” to the second question, about whether the F1095‐A included coverage for Jan‐Dec with no changes, then you’re only prompted to enter the annual amounts.

If you answer NO to that question, you’re prompted to enter the monthly amount.

One error I saw last year would happen when a volunteer entered all of the lines from the 1095‐A, both the annual totals and the monthly amounts. That would cause some strange outcomes. TaxSlayer’s dynamic entries won’t permit that error – you can only enter annual OR monthly amounts – not both.

In TaxSlayer, you just enter the information needed to complete the tax forms – you don’t see the forms themselves until the end. When we’re done with this entry screen, the software has all that it needs for Sally’s Form 8962. When we look at her completed return, we’ll see that she has a net Premium Tax Credit that will increase her refund.

During Quality Review, we’ll want to look over the Form 8962 carefully, and compare the entries with her Form 1095‐A. Are the dollars amounts and months of coverage correct? Is there anyone listed on the Form 1095‐A who is not on our tax return (because that would

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mean on out‐of‐scope policy allocation was needed.)

BACK TO AMELIA for the Scenario 3

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Thanks Kris

Let’s look at Scenario 3.

Taylor Tulane has one son, Alvin. Taylor and Alvin had Marketplace insurance all year. Dana Tulane has a son, Austin. Dana has Marketplace insurance all year. Alvin had CHIP all year.

Dana and Taylor got married in July of the tax year. They did not contact the marketplace. They do not wish to take the alternative calculation for the year of marriage.

We have two separate 1095A’s for Dana and Taylor.

Is this scenario out of scope for VITA? No

Taylor and Dana got married in July of the tax year. It is the taxpayers option to take the alternative calculation. Taylor and Dana do not wish to take the alternative calculation for the year of marriage.

This scenario is in scope of Vita.

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Now let’s look at both Taylor and Dana 1095A’s.

Since we have multiple 1095A’s we must determine the amounts to enter into TaxSlayer software for columns A, B, and C.

To get the column A number, you add the amounts from both Form 1095As. Example ‐ $254 + 221 = $475

To get column B when you have multiple 1095As, we must reference the Form 8962 instructions. Based on our current example, Taylor and Dana had marketplace plans from different states. We add together the amounts from column B. Example ‐ $375.58 + $242.33 = $617.91.

To get the column C number, you add the amounts from both Forms 1095‐A. Example ‐ $101 + 165 = $266

It is important to remember to always reference the Form 8962 instructions when you have multiple 1095A’s. You don’t always add amounts together.

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This is a TaxSlayer screen shot of where you enter the 1095A info from both 1095A’s.

Remember if Taylor and Dana had decided to take the alternative calculation for the year of marrieage this return would be out of scope for Vita.

Now I will turn it over to Therese to cover the Quality Review Process.

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Now that we have reviewed very quickly the basics of ACA, Form 13614‐C, and how to prepare the tax return, let’s look at conducting the quality review.

Using the source documents and Form 13614‐C, you should have all the information needed to determine if ACA was correctly reported on the tax return. For example,

• The checkbox on Form 1040, line 61 should be checked if everyone named on the taxreturn had full‐year Minimum Essential Coverage.

• If one or more individuals had an exemption for the year or any part of the year, Form8965 should be included in the tax return.

• Form 1040, line 61 should show a shared responsibility payment if one or moreindividuals did not have MEC and/or an exemption for one or more months of the year.

• If the taxpayer received the MEC from the Marketplace, the premium tax credit andadvance payments of the premium tax credit should have been reconciled on Form8962. If the taxpayer had MEC through the Marketplace, the volunteer preparer shouldhave checked to see if the premium tax credit was correctly computed‐even if thetaxpayer did not receive advanced payments.

Preparer notes are critical. You should have all the information needed to conduct the review. If you need to ask any questions, add your notes to Form 13614‐C.

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You basically have five options when quality reviewing a tax return prepared in TaxSlayer. You can:

• Print the return and conduct the quality review on the printed return – not a greatoption as if there is an error, you will have to re‐print the tax return

• Use 1040 View – limited to only providing pages 1 and 2 of Form 1040‐ again, not agreat option as you cannot see the entire tax return including all the forms, schedulesand worksheets.

• Review the return entries by comparing the source documents to the entries into thesoftware by accessing the return using the Enter Myself option. You could then reviewthe actual return, forms, schedules and work sheets to complete the review.

• Print to PDF and review the PDF – Is viable but you will need to toggle back and forthbetween the PDF and the TaxSlayer if errors are identified. You would need togenerate a new PDF after each correction, so identify all errors, make the corrections,and quality the new PDF until error‐free

• Summary Screen – Allows a summary view of each entry which can be compared tothe source documents and allows you to link more easily the section of the tax return(for input) to correct errors

Let’s take a quick look at the last two options.

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Access the PDF through Preview Return or Print Results. You would view the PDF on the computer. There is no need to print it first.

The PDF is the complete tax return. You will have the Form 1040, all related forms and schedules and worksheets.

I recommend completing the quality review and identifying all or any errors. Then go back to TaxSlayer and correct the errors. You may need to go back to sections and review the answers to a given tax issue before accessing the field that needs to be corrected. You can do using the same method used to prepare the tax return or through Summary.

Once the corrections are made, you will need to go back and create a PDF of the return and quality review it again to ensure accuracy.

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An alternative method is to use the Summary screen.

Within the Summary Screen, click on show details.

This opens all items under this section of the tax return. You can navigate to the area with an error from here. Items with entries on the tax return are in blue and allow you to link back to the questions for that issue. Once you correct the error, go back to summary and continue the quality review. It might be a little easier to navigate through the return with this option.

By the end of the filing season, I am sure everyone will have developed a hybrid of these options to successfully conduct quality reviews.

Now let’s look at quality reviewing ACA issues.

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Throughout the presentation, you have heard us reference a guide. The guide will be provided as soon as it has completed the approval process. The first part of the guide will have critical information for ACA and correlating screen shots of forms which relate to the ACA information covered. In addition, the guide will include this critical information further condensed in a table format for easier reference.

For example, this table is from the guide we are creating. It outlines all the possible outcomes of ACA and how they are reported on the tax return. It is intended to be used as a quick reference during your quality reviews.

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Quality review includes correlating the information provided on Form 13614‐C and the source documents with the completed tax return. The first step is to ensure Form 13614‐C is complete. Every question should be answered Yes or No and Unsure responses should have been reviewed with the taxpayer and the answer changed to Yes or No.

The information on Form 13614‐C and the source documents should correlate with what is reported on the tax return. Use any notes provided by the volunteer to clarify health insurance coverage. If an individual had gaps in coverage, ensure the volunteer considered whether an exemption applies. The return should show a Shared Responsibility Payment for any month with either no MEC coverage or an exemption for one or more individuals.

The volunteer preparer should have notated what kind of health coverage each person had on Form 13614‐C. Remember that the taxpayer is not required to provide proof of coverage. An oral statement from the taxpayer is acceptable unless due diligence leads you to believe the taxpayer’s statement is not consistent with the supporting documents. As part of your quality review, you will need to include any documents provided by the taxpayer regarding insurance coverage that are used to prepare the tax return.

Be alert for health insurance coverage which is not considered MEC being classified as MEC, including coverage that provides limited benefits, including but not limited to, Accident and/or disability insurance, Worker’s compensation and Limited‐services Medicaid.

Review the tax return to ensure a Shared Responsibility Payment is reported for the

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taxpayer; the spouse, if Married Filing Joint; any dependents; and anyone the taxpayer can, but does not, claim as a dependent if they don’t have either MEC or a coverage exemption for one or more months during the year. The Shared Responsibility Payment is computed using ACA worksheets which are embedded in TaxSlayer. As the quality reviewer, you will need to see or review the worksheets from TaxSlayer.

The Shared Responsibility Payment is capped at the national average premium for a bronze level health plan available through the Marketplace. The taxpayer will owe 1/12th of the annual payment for each month anyone on the return does not have either coverage or a coverage exemption. For children under the age of 18, the taxpayer will own ½ of the adult annual payment.

Quality reviewers should also be alert for miscalculations, including adding in dependent Modified Adjusted Gross Income or MAGI when it was not required.

If the taxpayer did not have MEC, ensure the volunteer included eligible coverage exemptions on Form 8965. Only one Form 8965 should be filed for the household. It should include applicable exemption claims for any individuals or a household coverage exemption.

The volunteer must use the affordability worksheets to determine if the taxpayer is eligible for the affordability exemption. Ensure the volunteer used the correct Household income; you will need to review the affordability worksheets if the taxpayer is claiming an affordability exemption. The volunteer should have used the Marketplace Coverage Affordability Worksheet ONLY IF the taxpayer is not offered employer coverage.

If the taxpayer has insurance through the marketplace, ensure the dependents listed on the tax return correlates to everyone listed on any and all Forms 1095‐A. Be alert for a Shared Policy Allocation, which is out‐of‐scope.

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If the taxpayer has multiple Forms 1095‐A and the amounts in Column A and Column C are not the same on all Forms 1095‐A, the volunteer will need to add the premium amounts reported and advance payments of the premium tax credit and enter the totals into Form 8962. When determining if the entry in column B is correct, remember that in many cases, if the Second Lowest Cost Silver Plan amount is the same on all Forms 1095‐A, the volunteer will enter that amount.

Form 8962 is used to compute the premium tax credit and reconcile any advance payments of the premium tax credit. Ensure the Household Income used is correct.

Potential errors include: Using an incorrect Second Lowest Cost Silver Plan premium Incorrect enrollment information such as the policy issuer’s name, the policy start or end date, enrollment premiums and/or the premium cost or the advance payment of the premium tax credit paid. Incorrectly reporting Form 1095‐A data on Form 8962. For example, the volunteer may not have transcribed information to Form 8962 accurately. Additional errors include the transposition of numbers when entering the data into the software, Miscalculating the annual premium tax credit or the monthly premium tax credit. And, lastly, miscalculating the excess advanced premium tax credit repayment amount. Be mindful of the calculations and the repayment caps.

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Remember that Parts IV and V of Form 8962 are out‐of‐scope for the VITA/TCE Programs.

The information I just provided is included in the Fact Sheet. The Fact Sheet is currently being finalized and should be available soon.

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Additional Out‐of‐scope issues include A Shared Policy Allocation. If the taxpayer has insurance through the marketplace, compare the dependents listed on the tax return to everyone listed on any and all Forms 1095‐A. The return is out‐of‐scope if someone is listed on a Form 1095‐A who is not listed on the tax return OR someone is listed on the tax return who is on a Form 1095‐A with another filer; This is a Shared Policy Allocation and is out‐of‐scope.

Another out‐of‐scope issue is the Alternative Calculation for Year of Marriage.

If the taxpayer got married during 2016 and advance payments of the premium tax credit were paid for an individual in the tax family, the taxpayer may want to use the alternative calculation for year of marriage, an optional calculation that may reduce the amount of excess advance payments of the premium tax credit which would have to repay under the general rules. If the following situation applies, an Alternative Calculation for Year of Marriage may be elected. If the taxpayer elects t

Documents

Thanks Frank/Robin/Kimfor that great opening. · child,limited to $2,085 for 2016) Promote Open enrollment –The2017 open enrollment period is Nov 1, 2016 to January 31, 2017 –thisis