Affordable Care Act Reminders for Tax Year 2016 Returns

Though the new Congress and Administration may substantially change the requirements for the Affordable Care Act, its current provisions remain in place for 2016 returns.

As we approach the beginning of the 2017 filing season here are some reminders about the Form 1095-A, exemptions from the requirement to have health insurance, and the increase in the individual penalty (individual shared responsibility payment) amount for 2016 federal income tax returns.

Importance of Form 1095-A

The Form 1095-A (Health Insurance Marketplace Statement) will be received by approximately 10 million individuals that obtained their 2016 health insurance at the Federal or a State Marketplace.

This form is needed in order to complete the 2016 Form 8962 (Premium Tax Credit) which calculates their Premium Tax Credit for 2016 and, for those who received a subsidy, to complete the reconciliation of the subsidy with the actual credit. Read more

Health Care Coverage Exemptions

Most individuals who did not have health insurance for all or part of 2016 probably qualified for an exemption. Therefore, it is important that before any penalty is calculated that an individual determines whether they may qualify for a health care coverage exemption.

If an individual qualifies for a health care coverage exemption they must complete the applicable parts of the 2016 Form 8965 (Health Coverage Exemptions) and include it with their 2016 federal tax return. Read more

Individual Penalty (Shared Responsibility Payment) for 2016

If it is determined that an individual does owe a penalty for Tax Year 2016, it is calculated as the greater of:

• 2.5% of the individual’s income that exceeds their 2016 filing threshold (personal exemptions plus standard deduction for their filing status);
  Or
• A flat dollar amount that is assessed for the taxpayer, spouse, and dependents as follows:
• $695 per taxpayer, spouse, and dependents over age 18
• $347.50 for each dependent under age 18

The maximum family flat dollar amount for 2016 is $2,085. Read more

Click here to read the entire CrossLink Tax Update that includes further information about the Form 1095-A, exemptions from the requirement to have health insurance, and the increase in the individual penalty amount for 2016 federal income tax returns.

IRS Announces 2017 Tax Filing Season Start Date

The 2017 Filing Season will begin on Monday, January 23, 2017 the IRS announced today. In its news release, the IRS also reminded taxpayers who will be claiming the Earned Income Tax Credit (EITC) and/or the Additional Child Tax Credit (ACTC) to expect a longer wait for their tax refunds.

The filing deadline to submit 2016 tax returns is Tuesday, April 18, 2017.

Click here to read the full IRS news release.

Federal Tax Law Changes that will Affect 2016 Federal Returns

Beginning with the 2017 filing season, refunds for tax returns that claim EITC or the Additional Child Tax Credit will be held until February 15. Read more . . .

Earned Income Tax Credit (EITC)

• Taxpayers can no longer file an amended return to claim the EITC for any year a qualifying child did not have a Social Security Number.
• Taxpayers whom the IRS finds have fraudulently claimed the credit can now be barred from claiming EITC for 10 years.
• Read More . . .

Child Tax Credit and American Opportunity Education Credit

• These two credits are now subject to the same due diligence requirements as EITC. This is reflected on the revised 2016 Form 8867 (Preparers Due Diligence Checklist). This also means that the Form 8867 must be attached to tax returns that are claiming the Child Tax Credit and/or the American Opportunity Credit.
• The IRS can bar a taxpayer from claiming the Child Tax Credit and American Opportunity Education Credit for two years if they have determined the individual has intentionally disregarded the rules for claiming either of these two credits.
• Read More . . .

Due Dates for Federal Corporate and Partnership Returns

• C Corporations (Form 1120)
  • Calendar year end - April 15
  • Fiscal year end - 15th day of the fourth month after the year end
• Partnerships (Form 1065)
  • Read More . . .

Click here to read the entire CrossLink Tax Update that includes further information about the changes made to federal tax laws that will affect tax returns for the 2017 filing season.

IRS, States, Industry Launch Second Year of Public Awareness Campaign: “Taxes. Security. Together.”

The IRS released the following update earlier today:

WASHINGTON — The Internal Revenue Service and its Security Summit partners today began the second year of their “Taxes. Security. Together.” campaign aimed at encouraging taxpayers to take stronger measures to protect their financial and tax data.

The campaign features a series of security awareness tax tips, a round-up of suggestions at the Taxes. Security. Together. web page and a one-page Publication 4524, Security Awareness for Taxpayers.

“These are common sense tips to help taxpayers ensure the security of their information,” said IRS Commissioner John Koskinen. “The Security Summit partnership between the IRS, states and industry has made great strides but we need taxpayers to ensure their information is secure as well.”

The IRS, state tax agencies and the tax community came together in 2015 to combat tax-related identity theft as a coordinated partnership. But they immediately saw that one partner was missing: taxpayers.

The IRS and its partners need the help of all taxpayers. The Security Summit also needs the help of tax preparers and businesses to share information and help educate clients and employees about security measures. For example:

• Always use security software with firewall and anti-virus protections. Make sure the security software is always turned on and can automatically update. Encrypt sensitive files such as tax records you store on your computer. Use strong passwords.
• Learn to recognize and avoid phishing emails, threatening calls and texts from thieves posing as legitimate organizations such as your bank, credit card company and even the IRS. Do not click on links or download attachments from unknown or suspicious emails.
• Protect your personal data. Don’t routinely carry your Social Security card, and make sure your tax records are secure. Treat your personal information like you do your cash; don’t leave it lying around.

Get Replacement Social Security Tax Forms Online

The following article was release by the Social Security Administration:

Preparing for tax season can seem overwhelming. Some forms and paperwork might be difficult to track down. Social Security has made this much easier with annual Benefit Statements.

An SSA-1099 is a tax form Social Security mails each year in January to people who receive Social Security benefits. It shows the total amount of benefits received from Social Security in the previous year so people know how much Social Security income to report to IRS on their tax return.

For non-citizens who live outside of the United States and received or repaid Social Security benefits last year, we will send form SSA-1042S instead. The forms SSA-1099 and SSA-1042S are not available for people who receive Supplemental Security Income (SSI).

If your clients currently live in the United States and need a replacement form SSA-1099 or SSA-1042S, we have a way for them to get an instant replacement quickly and easily. Encourage your clients to go online and request an instant replacement form with a my Social Security account at http://www.socialsecurity.gov/myaccount.  The online replacement form is available beginning February 1, 2017.

Every working person in the U.S. should create a my Social Security account. The secure and personalized features of my Social Security are invaluable in securing a comfortable retirement — for today and tomorrow. 

Last Day to Transmit 2015 Individual Federal and State Returns this Year

The IRS will be shutting down their 1040 Modernized E-file system on the morning of November 30, 2016. This shutdown will last until the 2017 filing season opens in January 2017.

If you have any 2015 federal or state tax returns that you wish to file as a current year return, you should transmit them by November 29, 2016 in order ensure that you are able to get acknowledgements back before the IRS system is shutdown on November 30, 2016.

Update on Change to Accessing E-Services

As a reminder, the IRS will be instituting changes to how e-services users will access their accounts. Originally the IRS said that all e-services users would need to re-register using the new Secure Access authentication process around October 24, 2016.

The IRS has announced that the IRS is delaying this requirement at this time.  The delay is to allow the IRS to discuss the proposed new Secure Access authentication process with key stakeholders and to ensure a smooth transition when they do implement the new process.

When a new date is set, the IRS will send out an announcement.

See the Important Update about Your e-Services Account page on the IRS website for more information on what the Secure Authentication Process is and for the official IRS announcement on this delay.

IRS Now Accepting ITIN Renewal Applications

This is a reminder that the IRS has begun accepting renewal applications for individuals whose ITINs will expire at the end of 2016.

Under the Protecting Americans from Tax Hikes (PATH) Act of 2015, the following ITIN holders must renew their ITIN before they file their 2016 federal tax return during the upcoming 2017 filing season:

• Have not used their ITIN on a tax return for the last three consecutive years; or
• Have an ITIN with the middle digits of 78 or 79.

The IRS recently sent letters to taxpayers with the affected middle digits informing them that they need to renew their ITINs.

To renew an ITIN, a taxpayer must complete Form W-7 and submit all required documentation to the IRS either by mail, through a Certified Acceptance Agent, or in person by making an appointment at an IRS Taxpayer Assistance Center. For renewals, a completed federal income tax return does not need to be attached to the Form W-7.

For more details on which taxpayers need to renew their ITIN as well as the process for renewing ITINs see the following on the IRS website:

• IRS news release of October 6 – IRS Now Accepting ITIN Renewal Applications
• IRS Form W-7 instructions

IRS Warns of Fake Tax Bill Emails

The IRS wants to make taxpayers and tax preparers aware that a new email scam has been reported around the country. This new scam involves fake emails that include an attached fraudulent version of IRS CP2000 notices for Tax Year 2015.

The fraudulent CP2000 notice includes a payment request that taxpayers mail a check made out to “I.R.S.” to the Austin Processing Center at a Post Office Box address. This is in addition to a payment link within the email itself.

The IRS wants to emphasize that the CP2000 is a notice commonly mailed to taxpayers through the US Postal Service. It is never sent as part of an email to taxpayers. The details of this scam are as follows:

• Notices are being sent electronically.
• The CP2000 notices appear to be issued from an Austin, Texas address.
• The notice is requesting information regarding Affordable Care Act insurance coverage for 2014.
• The payment voucher lists the letter number as 105C.

See the IRS and Security Summit Partners Warn of Fake Tax Bills news release of September 22, 2016 for more information.

Revised Form 8867 and the Expansion of Preparer Due Diligence Requirements

The IRS has released a draft of the newly revised and renamed Form 8867 (Paid Preparer’s Due Diligence Checklist). The changes are a result of the expansion of the paid preparer’s due diligence requirements (as included in the PATH Act) to cover the Child Tax Credit and the American Opportunity Education Credit as well as the Earned Income Tax Credit.

As a result of the expansion of the due diligence requirements, the Form 8867 has been revised as follows:

• Renamed to “Paid Preparers Due Diligence Checklist.” Was named the Paid Preparer’s Earned Income Credit Checklist.
• The questions related to qualifying children have been moved from the form to a related worksheet. These questions must still be asked, however, they will not be submitted to the IRS. The requirement to ask these questions are covered in question 2 of the revised 2016 Form 8867.
• Click here to read the full article on the CrossLink website.

Read the full article on the CrossLink website.

IRS Warns of New Wave of Cyber Attacks that Aim to Take Over Tax Preparers Computers

The IRS has posted a news release (IR-2016-119) to warn tax preparers of a new wave of attacks that allow identity thieves to file fraudulent tax returns by remotely taking over a tax preparer’s computer system.

These cyber-attacks are taking place using remote technology which allows the identity thieves to gain access to a tax preparer’s computer system, access client data, complete and e-file tax returns, then direct the refunds to the criminal’s own bank accounts. The IRS is aware of approximately two dozen cases where tax preparers have recently been victimized.

The victims learned of these thefts while they were reconciling their e-file acknowledgements.

See IRS News Release IR-2016-119 (dated September 2, 2016) for more details on these attacks and what measures tax preparers should take to protect their computer systems.

Also see the IRS Protect Your Clients; Protect Yourself webpage for more information how preparers can help fight identity theft and protect their customer tax return data and their computer systems.

Who Has to Renew Their ITIN and How They Can Renew It

The IRS recently announced how taxpayers with expired Individual Taxpayer Identification Numbers (ITINs) can renew them.

Here are two ways that an ITIN can expire, as explained in the Protecting Americans from Tax Hikes (PATH) Act of 2015, which made changes to the expiration rules for ITINs:

• ITINs issued before 2013 will expire as follows over the next 4 years:
• Issued before 2008 – January 1, 2017 (ITINs with middle digits of 78 and 79) -  Beginning in August 2016, the IRS will mail these individuals letters informing them that they need to renew their ITIN and how to do it.
• Issued in 2008 – January 1, 2018
• Issued in 2009 or 2010 – January 1, 2019
• Issued in 2011 or 2012 – January 1, 2020
• ITINs issued after 2012 will expire if they are not used on a federal tax return for three consecutive years

Who is Affected for the Upcoming Filing Season

A taxpayer who obtained their ITIN before 2008 or has not used their ITIN for 2013, 2014 and 2015 will need to renew it before they file their 2016 federal tax return this coming filing season.

How to Renew an ITIN

Beginning on October 1, 2016, an individual who needs to renew their expired ITIN must complete a Form W-7 (Application for IRS Individual Taxpayer Identification Number) and submit it to the IRS in one of the following ways:

• Mail the completed Form W-7, along with the original identification documents or certified copies by the agency that issued them, to the IRS address listed on the form.
• Use one of the many IRS authorized Certified Acceptance Agents or Acceptance Agents around the country.
• In advance, call and make an appointment at an IRS Taxpayer Assistance Center in lieu of mailing original identification documents to the IRS.

For renewal purposes, the IRS will not require a tax return to be attached to their submitted Form W-7. Also, taxpayers must use the newest version of the Form W-7 available at the time of renewal. For those renewing in the fall of 2016, the newest version will be available sometime in September (version 9-2016).

See IRS News Release IR-2016-100 (IRS Works to Help Taxpayers Affected by ITIN Changes; Renewals Begin in October) for more information.

Changes to IRS Individual Taxpayer Identification Number (ITIN) Expiration Rules

Individuals who obtained an ITIN before 2013 will be required to renew it over a staggered schedule between the end of 2016 and 2020 if they plan on continuing to use an ITIN to file a federal return.

The Protecting Americans from Tax Hikes (PATH) Act of 2015 did more than just extend the tax provisions that had expired at the end of 2014. The PATH Act also included, as part of its integrity provisions, changes to the circumstances in which an Individual Taxpayer Identification Number (ITIN) will expire.

Go to

http://www.crosslinktax.com/tax-updates/Changes-to-IRS-Individual-Taxpayer-Identification-Number-ITIN-Expiration-Rules.asp#.VumEz_krJQI to read the entire CrossLink Tax Update that includes further information about the changes to ITIN expiration rules.

IRS Temporarily Suspends their Identity Protection PIN Tool

As part of its ongoing security review, the IRS has temporarily suspended the Get an Identity Protection PIN tool on IRS.gov. The IRS has stated that it is conducting a further review of this application that allows taxpayers to retrieve their original IP PIN that was issued to them for calendar year 2016 online. The IRS is also looking to further strengthen the security features of this tool.

Taxpayers who were issued an IP PIN should continue to file their federal tax returns (and enter their IP PINs) as they normally would. 

The IRS offers the following guidance following the removal of this online tool:

• Lost or misplaced IP PINs – Individuals will need to call the IRS to verify their identity and the IRS will mail them their IP PIN. If they have moved since January 1, 2016 they must file their return on paper.
• Florida, Georgia, and District of Columbia pilot participants – Will not be able to obtain an IP PIN and may file their federal return as normal.

See the March 7 IRS Statement on IP PIN on the IRS website for additional information.

Special 2016 Federal Marketplace Enrollment Period for Individuals without Marketplace Insurance Due to Failure to File a 2014 Federal Return and Reconcile

The Center for Medicare and Medicaid Services (CMS) which runs the Federal Marketplace has announced that there will be a special enrollment period that will run from now until March 31, 2016. This special enrollment period is for individuals previously determined to have been ineligible for the Advance Premium Tax Credit (subsidy) in 2016 because they failed to file a 2014 federal return and did not complete the required reconciliation on Form 8962 (Premium Tax Credit).

The special enrollment period specifically applies to individuals who:

• Are not currently enrolled in 2016 coverage through the Federal Marketplace;
• Are not receiving an Advance Premium Tax Credit (APTC) because they failed to file a tax return for 2014 and reconcile their 2014 APTC; and
• Subsequently filed their 2014 federal tax return and reconciled their 2014 APTC on Form 8962.

Click here to read the entire article on the CrossLink website.

Delay of State Refunds Due to State Tax Identity Theft Prevention

Since identity theft related tax refund fraud has become the biggest problem States face, individuals can expect their State refund to take longer to be direct deposited into their bank accounts than in the past. This is due to the additional fraud measures that all States have instituted this filing season to fight this type of refund fraud.

Some States have indicated that they will be delaying the release of refunds for longer periods of time as follows:

Illinois and South Carolina not issuing refunds until after March 1, 2016

Illinois and South Carolina will not be sending out refunds on any returns filed in January or February until mid-March. For those returns filed after March 1, 2016, the refunds will be sent out within two to three weeks from the date the Illinois or South Carolina individual return is accepted.

For more information see the Illinois and South Carolina websites:

• Illinois Refund Delay Alert
• South Carolina January 19 News Release – Enhanced Efforts to Protect Taxpayers from Refund Fraud

The following States have increased the length of time a refund will be received on electronically filed returns:

• Idaho – Taxpayers can expect their refund about 7 weeks after their return has been accepted. See the Refund Information page on the Idaho State Tax Commission website for more information.
• Georgia – Taxpayers can expect their refund 30 – 45 days after the return has been accepted. See the New Fraud Prevention Measures announcement on the Georgia Department of Revenue website for more information.
• Louisiana – Taxpayers can expect their refund up to 60 days after the return has been accepted. See the January 19 Press Release on the Louisiana Department of Revenue website for more information.
• Alabama – Taxpayers can expect their refund in 8 to 12 weeks from the date their return is accepted. See the Taxpayer Identity Theft Prevention page in the Things to Expect from ADOR in the 2016 Filing Season section on the Alabama Department of Revenue website for more information.
• Hawaii – Taxpayers can expect their refund in 4-6 weeks. Some refunds may be delayed for up to 16 weeks. See the Update on Tax Refunds (January 8, 2016) on the Hawaii Department of Taxation website for more information.

States delaying refunds due to not having W-2s from employers:

• Utah will delay any refunds until March 1, 2016 for individuals whose employer had not filed their W-2s with Utah by January 31, 2016. See the Withholding Tax Changes information on the Utah State Tax Commission website.
• Alabama will delay issuing refunds this year on returns for which the state has not received the W-2(s) from a taxpayer’s employer(s). This means that early Alabama filers will not receive their refunds as quickly as they have in prior years.
• Vermont may not complete the processing of some returns until they receive the W-2 from the individual’s employer, which is not due until February 29, 2016. For more information see the 2016 Filing Season Update page on the Vermont Department of Taxes website.

One last reason for a state refund to be delayed is when the State selects an individual’s tax return for identity verification. When this occurs, a letter is sent asking that the individual verify their identity by going to the State website and answering questions. Once the individual has passed the verification quiz (i.e. they have verified that this is their return), the State will finish processing the return and send out the refund. So it is important that if an individual receives a request to verify who they are that they do it as soon as possible.

IRS Electronic Filing PIN Application Attacked by Malware

The IRS Electronic Filing PIN application was attacked by malware this week. The IRS posted the following on their News page:

===============

The IRS recently identified and halted an automated attack upon its Electronic Filing PIN application on IRS.gov. Using personal data stolen elsewhere outside the IRS, identity thieves used malware in an attempt to generate e-File PINs for stolen social security numbers. An e-file PIN is used in some instances to electronically file a tax return.

No personal taxpayer data was compromised or disclosed by IRS systems. The IRS also is taking immediate steps to notify affected taxpayers by mail that their personal information was used in an attempt to access the IRS application. The IRS is also protecting their accounts by marking them to protect against tax-related identity theft.

IRS cybersecurity experts are currently assessing the situation, and the IRS is working closely with other agencies and the Treasury Inspector General for Tax Administration. The IRS also is sharing information with its Security Summit state and industry partners.

Based on our review, we identified  unauthorized attempts involving approximately 464,000 unique SSNs, of which 101,000 SSNs were used to successfully access an e-File PIN.

The incident, involving an automated bot, occurred last month, and the IRS continues to closely monitor the web application.

This incident is not connected or related to last week’s outage of IRS tax processing systems.

===============

We will continue to monitor and update you as more information is released.

IRS Statement on System Outage

The IRS announced it resumed processing individual and business tax returns at approximately 5 p.m. Thursday following resolution of its system outage. Many of the tools and applications came up earlier on Thursday morning, including “Where’s My Refund” on IRS.gov.

“IRS teams worked throughout the night and around the clock on this system outage,” IRS Commissioner John Koskinen said. “Our processing systems are back in business. Taxpayers should see little, if any, impact on their tax returns or refunds. We apologize for the inconvenience this caused, and we appreciate the support and patience from taxpayers as well as our partners in the tax community and state revenue departments.”

The IRS emphasized that taxpayers do not need to take any additional steps or action due to the outage, including people who filed just before or during the outage. Throughout this period, taxpayers were able to continue to send their tax returns to their e-file provider; these companies have already started sending these tax returns into the IRS.

Taxpayers who have received a specific refund date from the “Where’s My Refund?” tool on IRS.gov should not be affected by the outage. The IRS reminds taxpayers that many variables factor into processing of tax refunds, including fraud prevention efforts, but we continue to anticipate that nine out of 10 taxpayers will receive their refunds within 21 days after being accepted by the IRS. In addition, the IRS reminds taxpayers that IRS.gov remains the best place to check for information on refunds. Additional information is available at: https://www.irs.gov/Refunds/What-to-Expect-for-Refunds-This-Year

The IRS is continuing to examine the underlying cause of the outage yesterday as well as monitoring any follow-up issues.  It's important to note that at this time this situation appears to be a hardware failure. 

IRS SYSTEM UPDATE

The IRS released the following update today regarding their systems:

IRS teams continued working throughout the night and this morning on the system outage, and many of our tools and applications came back up this morning, including “Where’s My Refund” on IRS.gov. We are continuing our work and analysis of our return processing system; we hope to have that back up again running at some point today. We will provide a further update later today.

While the e-file system for individual and business returns remains unavailable, the IRS reminds taxpayers they can still prepare and file tax returns as they normally would. Taxpayers can continue to send their tax returns to their e-file provider; these companies will hold the tax returns until the IRS resumes accepting electronic tax returns. Taxpayers who have already filed their tax returns do not need to take any additional action.

In addition, we continue to expect that 9 out of 10 taxpayers will receive their refunds within 21 days.

The IRS is continuing to examine the underlying cause of the outage yesterday.  It's important to note that this situation appears to be a hardware failure and nothing else. There is no indication that any external factors had any role in this incident.

Urgent Update on IRS Systems

PLEASE NOTE: CROSSLINK IS CONTINUING TO TAKE RETURNS and will submit them to the IRS once their systems come back online. See the Updated IRS statement below:

================
IRS Statement:

The IRS experienced a hardware failure this afternoon affecting a number of tax processing systems, which are currently unavailable. Several of our systems are not currently operating, including our modernized e-file system and a number of other related systems. The IRS is currently in the process of making repairs and working to restore normal operations as soon as possible. We anticipate some of the systems will remain unavailable until tomorrow.

The IRS remains in close contact with e-file software transmitters and the tax community during this period.

A number of taxpayer and tax practitioner tools are unavailable. IRS.gov remains available, although a number of the services on the site are not, including Where’s My Refund.

Taxpayers can continue to prepare and file their tax returns as they normally would. Taxpayers can continue to send their tax returns to their e-file provider; these companies will hold the tax returns until the IRS resumes accepting electronic tax returns. Taxpayers who have already filed their tax returns do not need to take any additional action.

The IRS is still assessing the scope of the outage. At this time, the IRS does not anticipate major refund disruptions; we continue to expect that 9 out of 10 taxpayers will receive their refunds within 21 days.
=================

Additional State Requests/Actions and the IRS IP PIN for the 2016 Filing Season

As the January 19 start date for the 2016 filing season draws near, here are some of the new actions that States are instituting to help fight tax identity theft and refund fraud, as well as an update on the IRS Identity Protection PIN.

Request by States for Driver’s License for the Upcoming Filing Season
As part of their continuing effort to combat tax identity theft and fraud, States will be requesting additional information be included with the tax return to help them confirm that the return they are receiving is truly the taxpayer’s. Providing the requested information will help ensure that the taxpayer’s tax refund will go to them and not to an identity thief.

One piece of information that nearly all States will be requesting is information from the taxpayer’s and spouse’s driver’s license or state-issued identification card. Although a return will not be rejected if the requested information from the driver’s license or state identification card is not present in the taxpayer’s return, not providing this information may delay the processing of the return and cause a delay in receiving any refund associated with the return.

Other State Actions to help Prevent Identity Theft and Tax Fraud
Below are some examples of new processes put in place by Illinois, Alabama, and Virginia that begin in the 2016 filing season:

• Illinois will not be sending out refunds on returns filed in January and February until mid-March. For those returns filed after March 1, 2016, the refunds will be sent out within two to three weeks from the date the Illinois return is accepted.
  See the Illinois Refund Alert on the Illinois Revenue website for more information.
• Virginia has begun to issue 7 alphanumeric Personal Identification Numbers (PINs) to Virginia taxpayers who have been identified as victims of identity theft. If a Virginia taxpayer is issued a PIN they must enter it on their Virginia individual income tax return to ensure that it is processed in a timely manner.
  See the Tax Related Identity Theft Prevention page on the Virginia Department of Taxation website for more information.
• Alabama will delay issuing refunds this year on returns for which the state has not received the W-2(s) from a taxpayer’s employer(s). This means that early Alabama filers will not receive their refunds as quickly as they have in prior years.

IRS Identity Protection PIN (IP PIN)
Beginning with the 2016 filing season, the IRS requires that an identity protection PIN (IP PIN) be entered on the 2015 tax return if an individual that is claimed as a dependent on a tax return has received an IP PIN from the IRS. Otherwise, the IRS will reject the tax return.

As a reminder, the IRS issues IP PINs to individuals who have had an identity theft indicator applied to their IRS tax account. These individuals will receive the IP PIN via IRS notice CPO1A this month (January).

Important Note: Due to an error, the IRS is emphasizing that all IP PINs that are contained in the CP01A notices that an individual receives this month (January) are for filing the 2015 tax return even though the notices incorrectly state they are for filing the 2014 tax return.

Other things to know about the Identity Protection PIN:

• If an individual loses their IP PIN, the original can be retrieved via the online IRS Get an Identity Protection PIN tool on the IRS website.
• Individuals who had an IP PIN in 2015 (for Tax Year 2014) should have received a new 6 digit IP PIN from the IRS this month (January) via IRS notice CP01A.
• When the taxpayer’s, spouse’s and/or dependent’s IP PIN is entered in the CrossLink program, they will be transmitted to the IRS as part of the Form 1040. The taxpayer’s IP PIN will print on Form 1040 in the area designated in the signature area. The Spouse’s and Dependent’s IP PIN will not print on the Form 1040 because the IRS has not included a place for them on the printed Form 1040.
• The IRS may also invite an individual to get an IP PIN by sending them a letter because their account met specific criteria that made them eligible to receive an IP PIN.

See the Identity Protection PIN page and the IP PIN FAQ page on the IRS website for more information.

Affordable Care Act – New Information Forms and How the ACA Relates to the Federal Tax Return

Below is an overview of the Affordable Care Act (ACA) related forms and the new information forms that all individuals who had health insurance in 2015 will receive during this coming filing season.

New Information Forms for the Upcoming 2016 Filing Season
There will be two new ACA related information forms that all taxpayers who had health insurance during 2015 will be receiving towards the end of March or early April of this coming filing season.

Since these two new information forms will be received late in the filing season, it is important to emphasize that they are for informational purposes only and are not needed to complete an individual’s 2015 federal tax return. Their purpose is to show individuals that they had health insurance during 2015, who was covered by their policy, and how many months they had coverage. They are essentially their proof that they had coverage during the year.

Form 1095-B (Health Coverage)
All individuals who had health insurance during 2015 will receive a Form 1095-B (Health Coverage) around the end of March 2016 from the insurance company that provided them coverage.

The Form 1095-B will give the individual policy holder the following information:

• The name, address, and SSN of each person covered by the policy
• The number of months each person was covered during the year
• The name of the health insurance issuer
• Name of Employer (if it is employer sponsored coverage)

Form 1095-C (Employer Provided Health Insurance Offer and Coverage)
All individuals that received health insurance from a company that had 50 or more full-time employees will receive a Form 1095-C (Employer Provided Health Insurance Offer and Coverage) around the end of March 2016.

The Form 1095-C will inform the employee of the following information:

• Name, address, and SSN of the employee
• Name and SSN of the employee’s dependents that were covered and for which months they were covered during 2015
• Name, address, and EIN of Employer
• For those who elected not to receive coverage, information on the coverage offered

It is also important to remember that none of the information on these two information returns is entered on the 2015 federal tax return. Therefore, it is not necessary for individuals to have received either of these two information forms in order to complete and file their 2015 federal tax return.

This is especially true for taxpayers who file in the early part of the filing season. Since they will not have received either the Form 1095-B or 1095-C, it is important to reiterate that the taxpayer may still file their 2015 federal tax return.

See the Questions and Answers about Health Care Information Forms for Individuals (Forms 1095-A, 1095-B, and 1095-C) on the IRS website for more information about the Forms 1095-B and 1095-C.

Affordable Care Act Related Forms
Below are the 2015 federal individual forms that are related to the Affordable Care Act:

• Form 1095-A (Health Insurance Marketplace Statement)
  This information return will be received by all individuals who purchased their health insurance from a Marketplace as follows:
  • Federal Marketplace – By end of this month (January). A copy will also be available via the individual’s account on healthcare.gov.
  • State Marketplace – No later than early February.
  
  
  The information included on Form 1095-A (Health Insurance Marketplace Statement) is needed to complete the Form 8962 for both the calculation of the Premium Tax Credit and to do the reconciliation of the credit with the Advance Premium Tax Credit (subsidy).
  See the Questions and Answers about Health Care Information Forms for Individuals (Forms 1095-A, 1095-B, and 1095-C) on the IRS website for more information on the Form 1095-A.

• Form 8962 (Premium Tax Credit)
  This form is completed by taxpayers who purchased their health insurance through a Marketplace and whose income is between 100% and 400% of the federal poverty line and are claiming a Premium Tax Credit.
  For individuals who received an Advance Premium Tax Credit (subsidy), this form must be completed in order to complete the reconciliation of the calculated Premium Tax Credit and the subsidy. If it is not included with the original return, the IRS will not complete the processing of the return until they receive a completed Form 8962, which will delay any refund shown on the return.
  The result of the calculation of the Premium Tax Credit and the reconciliation will be either a refundable credit or an additional tax.
  See the 2015 Form 8962 and the related instructions for more information.

• Form 8965 (Health Coverage Exemptions)
  Any individual who qualifies for an exemption from the requirement to have health insurance for all or part of 2015 will complete this form.
  For an explanation of what types of exemptions there are and how to apply for them, see the Exemptions section of the Affordable Care Act for Individuals page of the CrossLink Tax Resource Center.
  See the 2015 Form 8965 and the related instructions for additional information.