Affordable Care Act

File a Tax Return or Risk Losing Advance Premium Tax Credit

April 13, 2015 : H&R Block

As of April 9, two out of three U.S. taxpayers had already filed their tax returns. Bad news? There are still a third of you out there who may need to file. In fact, estimates show that about 7.5 million taxpayers annually do not file returns but should, based on data received by the IRS.

If you are due a refund, you may think it’s unnecessary to file. After all, if you don’t owe any taxes you won’t be charged interest and penalties. You can file anytime within three years and still claim that refund. But there’s a catch.

Did You Know

If you had health insurance coverage through a Marketplace plan, you are required to file a return and reconcile any advance premium tax credit you received. If you do not file a return, you may be denied premium tax credits during the next open enrollment, starting November 1. In regular-speak, that means you will not be able to get the advance payments that help you afford the monthly insurance premiums all year long. Instead, you will have to pay the full premium yourself.

So, when does this apply to you?

  1. An Advance Premium Tax Credit was paid to you or to another individual in your “tax family.”
  2. An Advance Premium Tax Credit was paid for someone you told the Marketplace you would claim as a dependent and neither you nor anyone else claimed that individual’s exemption. (Need more info on personal exemptions and dependency? This article has some tips.)

What if You Haven’t Filed?

Don’t panic. But don’t continue to wait around, either. The Tax Institute at H&R Block has estimated that there could be more than 1 million taxpayers who received an Advance Premium Tax Credit and still haven’t filed a return. If you are one of those people, we can certainly help navigate this tricky situation and make sure you continue to receive the advance premium tax credit.

Best advice: by April 15 either file a return and reconcile your credit or file for an extension. An extension will give you until October 15 to file your return and reconcile any credit you received through the Marketplace.

Make an appointment with one of our tax professionals or prepare your tax return online so you can stay in compliance.

More questions?

We know this is tricky stuff. If you are still stumped by your 1095-A form, or got an incorrect 1095-A, we have some advice for you.

If you still need health insurance in 2015 – and haven’t filed that tax return – you may qualify for a special enrollment period. However, you need to file a return and get enrolled before April 30.

Finally, if you’ve been putting off filing because you didn’t have any health insurance and are afraid of a penalty, you may want to determine if you are eligible for one of 30 possible exemptions.

If you still have questions, get more help from our ACA Tax Impact resource.

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