If you thought the Supreme Court's OK back in June of all Obamacare tax subsidies, whether issued by the federal or state insurance marketplaces, settled things as far as the national health care law goes, think again.
The Affordable Care Act, as it's officially named, still poses complications -- or at least some extra tax work -- for folks who are looking to get help from Uncle Sam to pay for their health care coverage.
Nationally, the ACA financial aid averages $272 a month and takes care of roughly three-fourths of a qualifying taxpayer's premium.
Two credit payment methods: That help is popularly known as a subsidy, but its official title is the Premium Tax Credit, or PTC. It is paid two ways.
The credit amount for which a taxpayer qualifies can go directly to the insurer throughout the year. This is known as the Advance PTC, or APTC, and it helps reduce the monthly health care coverage payments that taxpayers make.
Or a credit-qualifying taxpayer can choose to cover all insurance costs on his or her own and collect any PTC when he or she files a return.
Most people who qualified for the first-ever ACA tax credits last year got the advance version. But if those folks don't file a 2014 tax return, they won't be able to get the APTC in 2016.
The Internal Revenue Service says there are around 1.8 million taxpayers whose future APTC payments are in jeopardy. That's also this week's By the Numbers figure.
Reconciling ACA tax credit amounts: So what's the problem? If you got the APTC, you need to file a 1040 along with Form 8962 to reconcile that payment amount.
If you didn't get all the credit for which you were eligible, you'll get what you missed when you finally file. Conversely, if you got too much APTC, then you must pay back that excess with your tax return.
And yes, even if you're not otherwise required to file a tax return -- say you didn't make enough money to meet the filing threshold -- but got an APTC, you still must file a 1040 and 8962 to settle your ACA APTC amount.
No filing, no 2016 tax credit: If you don't reconcile your APTC situation soon by sending the IRS a Form 1040 and Form 8962 for the 2014 tax year, then you will not be eligible for the advance subsidy next year.
That means you'll be responsible for the full cost of your insurance's monthly premiums and all covered services.
The IRS is sending Letter 5591, Letter 5591A or Letter 5596 to individuals who received 2014 APTC payments, but who have not yet filed a 2014 tax return and Form 8962, to remind them to get the job done ASAP. Doing so will ensure that the taxpayers don't face a gap in receiving APTC payments in 2016.
The Department of Health and Human Services is planning its own outreach campaign in the fall in conjunction with the Nov. 1 start of the 2016 Obamacare enrollment season.
You also can get information on the need to file at the HealthCare.gov website or by calling the federal marketplace toll-free at (800) 318-2596.
If you got one of the letters, or didn't but got an APTC payment and haven't yet filed a 2014 tax return, get on the stick or get ready to pay more for your health coverage next year.
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