Form 1095-A Penalty Relief Available

Posted on May 07, 2015

Approximately 800,000 individuals received a Form 1095-A, Health Insurance Marketplace Statement, that contained an error regarding the premium paid. The error on the Form 1095-A may cause the IRS to assess penalties against those taxpayers because of the error. In a recent notice, the IRS stated that it will abate the certain penalties for taxpayers who received a delayed or incorrect Form 1095-A provided that they file a tax return by April 15, 2015, or by the extended due date of October 15, 2015.

If you received an incorrect Form 1095-A and already filed your taxes by the April 15, 2015 deadline:

The IRS also will not impose the accuracy related penalty under I.R.C. § 6662. On March 20, the IRS announced that if a taxpayer is enrolled in qualifying Marketplace coverage, filed taxes (with the incorrect 1095-A), they do not need to file an amended return. This relief program will not pursue collection of any additional taxes based on updated 1095-A information.

If you received an incorrect Form 1095-A and did not file your taxes before the April 15, 2015 deadline:

For those taxpayers who were not enrolled in a qualified healthcare plan in 2014 and erroneously received the Form 1095-A, those individuals must amend their federal Form 1040 tax return to reflect that they were ineligible to claim the tax credit and must also pay any of the associated liability in full.

In this instance, the IRS acknowledged the error and offered a relief to those taxpayers that followed the rules and enrolled in Marketplace coverage and filed taxes before the April 15 deadline.

Did you receive an erroneous Form 1095-A? If yes, prompt action on your part to correct the problem is strongly advised.