Health Care Tax Forms May Contain Error: What to Do

Posted by Madison on March 2, 2015

In order to claim the new health insurance premium tax credit on your tax return you need form 1095-A from the health insurance marketplace.

Last week the Department of Treasury announced that 800,000 (about 20%) of the 1095-A forms sent were wrong. Corrected forms will be sent this week.

The errors impacted tax returns in both directions; some people received a larger tax credit than they should have received and some people received a smaller tax credit than they should have received.

Here’s what to do if you are claiming the health insurance premium tax credit on your tax return.

What to Do If You Had Health Insurance through the Marketplace

How do you know if your 1095-A form is correct? Login to your account. There is a message in your account that will let you know if your form contained incorrect information.

What if you already filed your tax return with the incorrect form?

  • If you received too much: You are not required to amend your return and you do not owe additional taxes.
  • If you didn’t get enough: You many amend your return once you get a corrected 1095-A form and get a refund for any additional you are owed.

Once you get your corrected form, you can update your tax return using TurboTax to see if it is beneficial for you to amend your tax return.

What if you haven’t filed yet? You should wait to file until you get your corrected form.

What to Do If You Didn’t Have Health Insurance

How does the error impact the penalty for no health insurance? The error does not change the penalty for no health insurance. If you are subject to the penalty, you will still need to pay it.

What to Do If You Had Other Health Insurance

If you had other healthcare coverage (employer-sponsored plans, Medicare, Medicaid, or any other coverage listed as minimum essential coverage) you won’t receive a 1095-A form. You will still check the box on line 61 of your 1040 tax return. This error does not impact your tax return.

More on the Health Insurance Tax Credit

What is the Health Insurance Tax Credit? The health care premium tax credits are part of the Affordable Care Act (ACA), or Obamacare. The tax credits and health insurance subsidies are used to purchase health insurance through the new insurance exchanges. The tax credit adjusts the annual premiums you pay to a percentage of your household income.

You must file for the tax credit. Even if you do not normally file a tax return because you don’t meet the minimum income to file taxes, you’ll need to file a return to claim the health insurance tax credit or report advance payments.

Refundable. The health care tax credit is refundable, which means you can receive a tax refund even if the credit is more than your total tax.

Filing Status. Your health insurance credit will depend on your filing status. If you are married, you must file jointly to claim the health care tax credit. In addition, if someone else claims you as a dependent, you will not be eligible for the health insurance subsidies.

Delays. The first delay announced because of this error is an extended tax deadline for farmers and fishermen. We’ll continue to monitor the delays that the new forms will have on getting your refund.

More Health Insurance Tax Topics

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