Your tax return can impact your health insurance costs if you have a plan through the marketplace. If you’re insured by an employer, your health insurance won’t impact your taxes, unless you contribute to an HSA or FSA. If you’re uninsured, you may be penalized when filing your tax return.
The Affordable Care Act stipulates that all Americans must have health insurance. You may have medical insurance through your workplace, through the healthcare marketplace, or through a government program, like Medicaid or Medicare. If you don’t have health insurance, there is no federal penalty (as of 2019), but there may be a state penalty that you’ll pay when filing your tax return.
If you have a healthcare plan through the marketplace, your tax return information can come in handy. That’s because when applying for health insurance through the marketplace, you’ll need to provide your gross income, which your current or previous year’s tax return can help you calculate.
Those with healthcare plans through the marketplace may also qualify for the Premium Tax Credit, which can help you cover monthly insurance costs. You’ll need to meet certain income limits and not have access to a government or employer sponsored plan to qualify. Those who received Advanced Premium Tax Credit payments are required to file a tax return to help reconcile the tax credit.