ACA Clients that currently receive subsidies (tax credits) could be in jeopardy of losing them if they do not act by the end of August 2015 to remedy their risk. The IRS has been sending invoices and official letters to your clients. According to the IRS, if your client filed their 2014 tax return and submitted Form 8962 with their tax return, no additional information is required.
However, if your client did not submit Form 8962 with their 2014 tax return, additional action is required.
If your client received Form 1095-A from the Marketplace, it will contain the information needed to complete Form 8962.
Failing to file 2014 tax returns will prevent advance payments in 2016
The IRS reminds taxpayers who received subsidies in 2014 that they should file their 2014 tax return as soon as possible this summer to ensure they can timely receive advance payments next year from their Marketplace.
If subsidies were paid on behalf of your clients in 2014, and they do not file a 2014 tax return, they will not be eligible for advance payments of subsidies (tax credits) or the additional cost-sharing reductions in 2016. This means your clients will be responsible for the full cost of your monthly premiums and all covered services, regardless of their income and ranking on the FPL (Federal Poverty Level). In addition, the IRS may contact your client to pay back some or all of the 2014 advance payments of subsidies.
Because Marketplaces will determine eligibility for subsidies and cost-sharing reductions for the 2016 coverage year this fall, it will substantially increase your client’s chances of avoiding a gap in receiving this help if they file their 2014 tax return with Form 8962 electronically as soon as possible.
If your client missed the April 15 deadline or received an extension to file until Oct. 15, they should file their return as soon as possible. Please advise your clients that they should not wait to file. File now to reconcile any subsidies received in 2014 and to maintain their eligibility for future premium assistance.
Remember that filing electronically is the best and simplest way to file a complete and accurate tax return as it guides you through the process and does all the math.
You may click here to read the article in it’s entirety from the official IRS website for the Affordable Care Act.
You may also click here to download Form 8962. You may also download complete instructions how to properly complete Form 8962 when filing taxes. This form will only need to be completed by subsidy eligible clients enrolled through the Health Insurance Marketplace.
