Taxpayers Get Health Care Break

The Treasury Department, the parent agency of the Internal Revenue Service, has announced that if you received incorrect information about your Marketplace-purchased health care plans, you won’t have to pay a penalty or additional tax related to the wrong information, and you don’t even need to file an amended return.

One of the big stories of this tax season has been the news that some taxpayers got an incorrect Form 1095-A. If you who got insurance from a Marketplace, the 1095-A contains information you need in order to fill out your tax return. Nearly a million Form 1095-As were mailed out with wrong premium amounts for the second lowest cost Silver plan, which is used to determine the amount of Premium Tax Credit a taxpayer might qualify for. And while that amounted to less than 1 percent of the total number of taxpayers, it still meant hundreds of thousands might have needed to amend their already-filed tax returns to make things right.

The Treasury Department assures us not to worry.

So, if you had Marketplace coverage and filed an income tax return based on a Form 1095-A with incorrect data, you need to do NOTHING. The IRS will not attempt to collect any additional tax from you based on the corrected 1095-A, and you don't need to file an amended return. This applies whether you got your health coverage through the federal Marketplace or a state-run Marketplace.

Officially, the Treasury says you can file an amended return to correct the mistaken 1095-A, but you don’t have to.

You’ve Got Questions

And we’ve got some answers, straight from the Treasury Department:

Question: Does this relief apply to everyone who received a late or incorrect 1095-A?

Answer: No. The relief would not apply if you did not enroll in Marketplace coverage, but nonetheless received a Form 1095-A and erroneously claimed a premium tax credit on their return.  It also would not apply if you were enrolled in Marketplace coverage, did not receive a Form 1095-A, and filed a return without this information. Neither situation is expected to be common. Nonetheless, if either happened to you, you should file an amended tax return. If you choose not to amend, the IRS may contact you following its normal procedures in cases where additional taxes are due. The Treasury estimates that the impact on your tax liability, if any, will be small in the vast majority of cases.

Question: What if I never received a 1095-A but I filed my taxes anyway without the information from the form?

Answer: The relief would not apply in this situation and you should file an amended tax return. You should have received a Form 1095-A by now, or should be receiving one soon. If you choose not to amend, the IRS may contact you following its normal procedures in cases where additional tax is due. This situation is not expected to be common.  

Question: What if I can’t file my taxes by April 15 because my 1095-A was incorrect or late?

Answer: If you have been notified of errors on your Form 1095-A and have not yet filed your tax return, you should wait to file until you receive your corrected 1095-A.

In cases where you are unable to file your taxes by April 15 because you have not received a Form 1095-A, the Treasury will consider options for possible relief and will provide additional information closer to the deadline.