Failure to file 2014 tax returns will prevent advance payments of premium tax credit in 2016

The IRS is reminding individuals who received advance payments of the Premium Tax Credit (PTC) in 2014 to file their 2014 tax return as soon as possible. Individuals who fail to file a 2014 tax return will not be eligible to receive advance payments of the PTC in 2016. Individuals who are not eligible for advance payment of the PTC will be responsible for the full cost of the monthly premiums and all covered services. In addition, nonfilers may need to pay back some or all of their 2014 advance payments.

Individuals who chose to have advance payments of the PTC sent directly to their insurer are required to file a tax return and complete Form 8962 to reconcile the advance payments to the actual credit, even if they are not otherwise required to file.

The IRS is currently sending Letter 5591 to individuals who received 2014 PTC advance payments but have not yet filed a 2014 tax return, to remind them of the importance of filing their tax return along with Form 8962. The letter encourages taxpayers to file within 30 days of the date of the letter in order to avoid a gap in receiving advance payments of the PTC in 2016.

Individuals receiving advance payments of the PTC should have received Form 1095-A, Health Insurance Marketplace Statement, from their Marketplace. This Form 1095-A provides information needed to complete Form 8962. Individuals with questions about the information on Form 1095-A for 2014, or about receiving Form 1095-A for 2014, should contact their Marketplace directly.

SOURCE: IRS, 2016 Advance Payment Premium Tax Credit Notice, August 4, 2015.

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