Expanded Relief for Taxpayers Receiving Erroneous 1095-As

March 23, 2015
Kristine A. Tidgren

The ACA "relief" saga continues. On Friday, March 20, after discovering more erroneous Form 1095-As, the Treasury Department issued "expanded" relief .

In February, the Treasury Department issued "relief" to certain taxpayers who had filed their tax returns in reliance upon one of the estimated 800,000 incorrect Form 1095-As that had been issued by the federally-facilitated Marketplace. These incorrect forms had reported the premium amount for the second-lowest priced Silver plan for 2015, not 2014, as they should have. This information is required to calculate the amount of the premium tax credit to which the taxpayer was entitled in 2014. In other words, taxpayers relying on the faulty data incorrectly calculated their premium tax credit and either overpaid or underpaid when reconciling the advanced premium tax credit they received earlier in the year. On February 24, Treasury announced that it would not require those taxpayers who had already filed their returns in reliance upon the incorrect 1095-A data to file an amended return. If taxpayers benefited from the error, they could keep the overpayment. If they were harmed by the incorrect Form 1095-A, they could file an amended return to correct the difference.

On Friday, March 20, CMS announced that it had discovered additional 1095-A errors among those forms issued by both State-run exchanges and the federally-facilitated exchange. CMS is notifying taxpayers impacted by these errors with emails, phone calls, and messages in their Marketplace accounts. Because of these errors, Treasury is expanding the relief it offered in February.

Now, anyone who (1) enrolled in any type of marketplace coverage, (2) received an incorrect Form 1095-A, and (3) filed their return based upon that form, does not need to file an amended tax return. The IRS will not pursue the collection of any additional taxes based on updated information contained in the corrected forms. This relief applies to tax filers who enrolled through either the federally-facilitated marketplace or a state-based marketplace. As provided before, taxpayers who were harmed by the errors may file amended returns to collect the difference.

The agency is still urging taxpayers who received an erroneous Form 1095-A to to wait to file their returns until they receive a corrected form.  It has also clarified that the stated relief does not apply to taxpayers who:

  • Did not enroll in Marketplace coverage, but received a Form 1095-A.
  • Enrolled in Marketplace coverage, but filed their returns before receiving a 1095-A at all.

The Treasury Department states in its Q & A that it will consider further relief if corrected forms are not distributed in time for taxpayers to meet the April 15 deadline. More information will be provided "closer to the deadline."

Stay tuned.

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