Questions and Answers - Incorrect Forms 1095-A and the Premium Tax Credit

The following questions and answers relate to the 2014 tax year and Forms 1095-A reflecting coverage in 2014. The relief provided below applies only to the 2014 taxable year.  For questions and answers of a more general nature regarding corrected and voided Forms 1095-A see the Corrected or Voided Form 1095-A page.

On February 20, 2015, the Centers for Medicare and Medicaid Services (CMS) announced that about 800,000 tax filers who purchased health insurance from the Federally-facilitated Marketplace during 2014 received a Form 1095-A, Health Insurance Marketplace Statement, that contained an error related to the second lowest cost Silver plan (often referred to as the benchmark plan). On February 24, 2015, the Department of the Treasury issued a statement concluding that those affected taxpayers who had already filed an income tax return using the incorrect form do not need to amend their income tax return. On March 20, 2015, Treasury expanded that relief to apply to additional situations faced by tax filers.  On April 10, 2015, Treasury and IRS issued Notice 2015-30 PDF which provides penalty relief for  individuals who were unable to file a complete and accurate return by April 15 due to a delayed Form 1095-A or a Form 1095-A that the taxpayer believes to be incorrect.

The March 20, 2015, guidance was in the form of frequently asked questions, which are incorporated into the FAQs below.  

Q1: What relief was announced on March 20, 2015?

A1: On March 20, in light of CMS’s announcement of additional incorrect information on certain Marketplace tax statements (Forms 1095-A), the Department of the Treasury expanded the relief it announced previously on February 24.  If you were enrolled in qualifying Marketplace coverage, filed your return using information from your Form 1095-A, Health Insurance Marketplace Statement, and you later learn that the information on that form was incorrect, you do not need to file an amended return. This is true even if additional taxes would be owed based on the new information.  Under the relief provided, the IRS will not pursue the collection of any additional taxes from you based on updated information in the corrected form. This relief applies to tax filers who enrolled through the Federally-facilitated Marketplace or a State-based Marketplace. Even though you are not required to file an amended tax return, some taxpayers may choose to do so if the updated information is in their favor. You may want to consider consulting with a tax preparer to determine if you want to file an amended return.

Q2: What additional relief was announced on April 10, 2015?

A2: In light of some tax filers not receiving their correct Forms 1095-A, Health Insurance Marketplace Statement, in time, the Treasury Department and IRS issued Notice 2015-30 PDF on April 10, 2015. It provided penalty relief for individuals who were unable to file an accurate return by April 15. Generally, in order to qualify for this relief, taxpayers must have filed either Form 1040 (series) or Form 4868 PDF  (requesting an automatic extension) by April 15. This relief applies only for the 2014 taxable year. See Notice 2015-30 for more specifics on the relief.

Q3 How will I know if my Form 1095-A was wrong or delayed?

A3: If you received your coverage through a Marketplace in 2014, you may have received an incorrect 2014 Form 1095-A, Health Insurance Marketplace Statement, or your form may have been delayed. If you were affected, the Marketplace should have notified you by email, phone, or through your Marketplace account.  If you identify errors on your own or have questions about your form, reach out to the Federally-facilitated Marketplace call center at 1-800-318-2596 or your State-based Marketplace. The IRS provides a list of Marketplace contacts at this link.

Q4.  I enrolled in qualifying Marketplace coverage, received a Form 1095-A, Health Insurance Marketplace Statement, and filed my 2014 federal income tax return using this Form 1095-A. I received a notice that the Form 1095-A I used had incorrect information. Do I need to file an amended return?

A4. No.  If you enrolled in qualifying Marketplace coverage, received a 2014 Form 1095-A, and filed your tax return based on that form, you do not need to file an amended return based on your corrected Form 1095-A.  This is true even if additional taxes would be owed based on the new information.  Nonetheless, you may choose to file an amended return.  You should consider consulting with a tax advisor to determine if you want to file an amended return.

Q5. The information in my corrected 2014 Form 1095-A, Health Insurance Marketplace Statement, would cause my federal income tax payment to decrease or my refund to increase.  Can I file an amended return since this change is in my favor?

A5. Yes.  In some cases, the information on the corrected 2014 Form 1095-A may be in your favor – it may decrease the amount of taxes you owe or increase your refund.  Taxpayers have the option of filing an amended return if they choose. Generally, taxpayers have up to three years from the date they filed their return, or two years from the date they paid the tax, whichever is later, to file an amended return.  You should consider consulting with a tax advisor to determine if you want to file an amended return.

Q6. I received a 2014 Form 1095-A, Health Insurance Marketplace Statement, which I used to file my 2014 income tax return and claim the premium tax credit. After I filed, the Marketplace notified me that the Form 1095-A was issued in error because I never completed enrollment or because the Form 1095-A was incorrectly issued for coverage that does not qualify for the premium tax credit.  Should I file an amended return?

A6. Yes, you should file an amended 2014 return. The premium tax credit is available only for eligible taxpayers who enrolled in qualifying Marketplace coverage.  If you never paid premiums for your coverage then you were not enrolled in coverage. In addition, stand-alone dental plans and catastrophic plans do not qualify for the premium tax credit.  If you filed and incorrectly claimed a premium tax credit based on these forms, and you do not amend your return, the IRS may contact you about additional tax due.

Q7. I purchased qualifying Marketplace coverage, and advance payments of the premium tax credit were made to an insurance provider on my behalf. I filed without receiving my 2014 Form 1095-A, Health Insurance Marketplace Statement, and did not include that information when I filed my taxes. Should I file an amended return?

A7. Yes, you should file an amended return. You are required to reconcile advance payments of the premium tax credit made to your insurer on your behalf through the Marketplace to ensure you receive the correct amount of the premium tax credit. You agreed to this process when you enrolled in the Marketplace.  If you filed a 2014 income tax return and failed to reconcile your advance payments of the premium tax credit, you should file an amended return, using the information on your 2014 Form 1095-A.  If you do not have a copy of your Form 1095-A, reach out to the Federally-facilitated Marketplace call center at 1-800-318-2596 or your State-based Marketplace. See question 9 for additional information about filing an amended return.

Q8. I purchased qualifying Marketplace coverage, and advance payments of the premium tax credit were made to an insurance provider on my behalf. I filed without receiving my Form 1095-A, Health Insurance Marketplace Statement, and did not include the necessary information about my Marketplace coverage on my return.  I received a letter from the IRS saying I need to reconcile my advance payments of the premium tax credit using Form 8962. What should I do?

A8. Follow the instructions in the letter from the IRS.  If you do not have a copy of your Form 1095-A, request one from your Marketplace.

Q9.  How do I file an amended return?

A9.  Use Form 1040-X PDF to amend your return.  You can do so by using software, with the assistance of a tax preparer, or by submitting Form1040-X to the IRS. Generally, taxpayers have up to three years from the date they filed their return, or two years from the date they paid the tax, whichever is later, to file an amended return.  You should consider consulting with a tax advisor to determine if you want to file an amended return.  More information about filing an amended return is available on irs.gov.

Q10. I enrolled in qualifying Marketplace coverage, received a 2014 Form 1095-A from the Marketplace, and filed a tax return based on this Form 1095-A.  The Marketplace subsequently informed me that the Form 1095-A I used contained an error and sent me a corrected 2014 Form 1095-A.  How do I know if I will benefit from filing an amended tax return based on the corrected Form 1095-A?

A10.  If you enrolled in qualifying Marketplace coverage, filed a tax return based on a 2014 Form 1095-A that you have been told contained an error, and have received a corrected 2014 Form 1095-A, comparing the two Form 1095-As can help you assess whether you are likely to benefit from filing an amended tax return. 

Specifically, you are likely to receive a larger refund or owe a smaller tax payment using the corrected 2014 Form 1095-A if the two 2014 Forms 1095-A generally show the same information but any one of the five scenarios below is true of your corrected form.  If there were multiple differences between your original and the corrected forms or you are not sure if you would benefit from amending, you may want to consult with a tax preparer. You are likely to benefit from amending if, on your corrected 2014 Form 1095-A:

1) The Second Lowest Cost Silver Plan Premium is Larger: The monthly premium amounts of the second lowest cost Silver plan, shown in Part III, column B, lines 21-32, are greater on the corrected form than on the original form.

• Example: If the original 2014 Form 1095-A shows a premium of $200 on these lines, and the corrected 2014 Form 1095-A shows a premium of $300 on these lines, then you are likely to benefit from filing an amended return.

2) The Monthly Premium Amounts are Larger: The monthly premium amounts of the plan in which you enrolled, shown in Part III, column A, lines 21-32, are greater on the corrected form than on the original form. 

• Example: If the original 2014 Form 1095-A shows a premium of $180 on these lines, and the corrected 2014 Form 1095-A shows a premium of $250 on these lines, then you are likely to benefit from filing an amended return.

3) The Advance Payment of the Premium Tax Credit Amounts are Lower: The monthly amounts of advance payment of the premium tax credit (APTC), shown in Part III, column C, lines 21-32 are smaller on the corrected form than on the original form. 

• Example: If the original 2014 Form 1095-A shows APTC of $60 on these lines, and the corrected 2014 Form 1095-A shows APTC of $50 on these lines, then you are likely to benefit from filing an amended return. 

4) It Lists More Months of Coverage and your Situation Meets all the Following Conditions:

• The corrected form shows more months of coverage than the original form. This means  that the corrected form shows positive values in more of the rows under Part III than the original form.  
  • Example: The corrected form shows positive values in lines 21-32 (indicating coverage lasting from January-December), while the original form shows positive values only on lines 21-26 (indicating coverage lasting from January-June).
• The values are the same on the corrected form for the months that the original form showed coverage.
  • Example: If the original form showed coverage on lines 21-26, the two forms show the same values on those lines.
• On your original tax return you claimed a net premium tax credit, meaning you entered a value on line 26 of the 2014 Form 8962 you filed. This would be the case if either your total premium tax credit (line 24 of the Form 8962) exceeds the APTC you received (line 25 of the Form 8962), or because you entered a value for total premium tax credit on line 24 and did not receive APTC (line 25).

5) It Lists Fewer Months of Coverage and your Situation Meets all the Following Conditions:

• The corrected form shows fewer months of coverage than the original form. This means that the corrected form shows positive values in fewer of the rows under Part III than the original form.  
  • Example: The original form shows positive values on lines 21-32 (indicating coverage lasting from January-December), while the corrected form shows positive values on lines 21-26 (indicating coverage lasting only from January-June).
• The values are the same on the original form for the months that the corrected form shows coverage.
  • Example: If the corrected form shows coverage on lines 21-26, the two forms show the same values on those lines.
• On your original tax return, you reported owing a repayment of excess APTC, meaning you entered a value on line 29 of the 2014 Form 8962 you filed.  This would be the case if the APTC you received (line 25 of the Form 8962) exceeded your total premium tax credit (line 24 of the Form 8962).

See question 9 for additional information about filing an amended return.  Also, see questions 6 and 7 for situations not covered by this question in which you should file an amended return.