ADVANCE PREMIUM TAX CREDITS UNDERREPORTED:

News from RWHSG

Posted by Kim Chen on January 23rd, 2016

Eligible individuals who get health insurance through the health insurance marketplace can have Advance Payments of the Premium Tax Credit (APTC) made directly to their insurance provider to reduce their monthly premiums. Taxpayers receiving APTCs must file a tax return to reconcile the APTC on IRS 8962, regardless of whether they otherwise had a tax filing requirement [IRC Sec. 36B(f)]. In a letter to Congress IRS Commissioner, John Koskinen, said that preliminary data from the 2015 filing season indicates that about one-third of the 4.6 million taxpayers who received APTCs for 2014 coverage didn’t report the credit on their 2014 tax returns. The IRS is evaluating the discrepancy and looking for methods to ensure that practitioners and taxpayers are accurately reporting the credit and filing IRS 8962 correctly. It also contacts taxpayers who received an APTC and didn’t complete the filing requirements correctly. The Commissioner’s letter can be found at www.irs.gov/pub/newsroom/irs_letter_aca_stats_010816.pdf .