The Treasury Department has an easy fix for taxpayers who filed their returns using inaccurate data sent by HealthCare.gov: They don’t have to do anything at all.
Last week, the federal government said that it sent incorrect tax forms to about 800,000 people who bought insurance through the federal health care exchange. An estimated 50,000 taxpayers had already filed their returns using inaccurate information.
But a senior Treasury official said late Tuesday that people who had already filed were not required to amend their returns. He added, however, that they could do so if they expected the updated data to generate a larger refund.
This is the first tax season in which individuals must reconcile through their tax returns any federal health care subsidies they may have received. Millions of people who bought insurance through the exchanges received an advance payment of a tax credit to defray the costs of the premiums. Those credits were based, in part, on how much buyers were expected to earn in 2014, as well as on the cost of a “benchmark plan.” Since the credits were based on estimated income, taxpayers need to reconcile any differences against their actual 2014 income.
But the forms needed for that reconciliation — known as 1095-A forms — contained an error: the cost of a benchmark plan for 2015, not 2014.
People who received the erroneous forms but who have not yet filed their returns are encouraged to wait until they receive a new 1095-A, which should be mailed in early March, according to the federal Centers for Medicare and Medicaid Services. The forms will also be made available at HealthCare.gov.
The government said it had started notifying those affected by phone, mail and email. Taxpayers can also find out if they received inaccurate forms by logging onto their HealthCare.gov account.
Taxpayers who filed using the wrong data may wonder if they should amend their return. The Treasury Department said a tax filer is likely to benefit from refiling if the 2015 monthly premium for their “benchmark plan” is less than the 2014 premium found on the updated form. So, for example, if a taxpayer’s original form lists a benchmark premium of $100 and her updated form lists one of $200, it may be in her interest to amend the return, the department said.
But those who owe more and choose to do nothing will not be penalized.
H&R Block, Jackson Hewitt and TurboTax have all said they would not charge customers to file amendments.