Premium tax credits can cause confusion, as evidenced by the letter that many Americans are receiving after incorrectly filing their taxes in 2015.
This letter from the IRS outlines the problem and the actions to take to correct it. In this post, we’ll discuss how taxpayers in Indiana and the rest of the United States can take action to resolve the issue.
Understanding Your Letter
The letter states that: “According to our records, advance payments of the premium tax credit were made for health care coverage from the Health Insurance Marketplace for you or someone listed on your return. You’re required to reconcile the advance payment amount on your tax return using Form 8962, Premium Tax Credit, with the premium tax credit you are allowed on your return. If you don’t reconcile, you won’t be eligible for advance payments of the premium tax credit or cost-sharing reductions to help pay for your Marketplace health insurance coverage in 2017.”
In other words, taxpayers who failed to indicate that they received a premium tax credit when filing need to correct this problem. If you’ve received the letter and fail to do so, you will not be able to receive the advance premium tax credit payment in 2017.
Amending Your Return
Here are the IRS recommendations for resolving the issue:
“The computation of Form 8962 may lead to a change in your tax return. If so, don’t send us a Form 1040X to amend your return. Send us the following documents:
-a completed Form 8962
-a copy of your Form 1095-A
-a newly computed page 2 of your tax return with your original signatures, showing the transferred amount from Form 8962, if applicable”
If you need assistance locating these forms, call the Baker office and a member of our team will be happy to help you.
Be sure to follow the appropriate steps when purchasing insurance through the federal marketplace. Regulations change and get updated regularly, so it’s important to check the marketplace regularly to stay informed.
If you qualify for a premium tax credit, be sure to make yourself a note to claim it when filing your taxes. Alternatively, consider hiring a tax professional to help you navigate health insurance regulations as related to your tax return.
Feeling confused or frustrated as you try to manage your premium tax credit? The trusted team at Baker Retirement & Wealth Management, PC can help. Evansville area individuals and businesses have relied on our expertise for nearly thirty years. Simply stop by one of our offices in Evansville, Owensville, Newburgh, or Boonville, or give us a call toll free at 1-866-244-3517.Talk to a CPA for Free