Taxpayers Won’t Have To Resubmit Taxes After ACA Tax Form Error

On Tuesday, the Obama administration announced that U.S. residents who received incorrect Affordable Care Act tax forms and already filed their taxes do not have to amend their tax returns, the New York Times' "Your Money" reports (Siegel Bernard, "Your Money," New York Times, 2/24).

Background

The Obama administration on Friday said about 20% of U.S. residents, or around 800,000 people, who enrolled in coverage for 2014 through the federal exchange received 1095-A forms that included the wrong value for the local premium, which influenced other tax calculations. According to an HHS official, "Because of an intermittent defect in the code that was used to create these forms, the premiums listed were for 2015" instead of 2014. As a result of the error, taxpayers might claim a subsidy that is either higher or lower than that for which they are eligible (California Healthline, 2/23).

According to the Treasury Department, around 50,000 individuals who received the incorrect forms already have filed their taxes (Snell, Politico, 2/25). The administration did not say how many people might have paid too much in taxes or too little because of the error (Sullivan, The Hill, 2/24).

No Action Needed

The announcement means that individuals who received larger tax refunds than they should have because of the mistake can keep the extra funds ("Your Money," New York Times, 2/24). The department in a statement said, "The IRS will not pursue the collection of any additional taxes from these individuals based on updated information in the corrected forms" (Alonso-Zaldivar, AP/Washington Times, 2/24).

Meanwhile, individuals who believe they received smaller refunds than they were due can update their returns. The department noted that taxpayers who received forms that stated a 2015 monthly premium less than the 2014 premium listed on the corrected forms should amend their returns ("Your Money," New York Times, 2/24). Still, a department spokesperson said such "[i]ndividuals may want to consult with their tax preparers to determine if they would benefit from filing amended returns" (Adams, CQ HealthBeat, 2/24).

The department is urging those who have received an incorrect form and have not yet filed their taxes to wait to do so until they receive a new form, which CMS said should be sent in early March. According to "Your Money," the forms will also be available through HealthCare.gov.

Federal officials have begun notifying individuals affected by the errors via email, mail and phone. U.S. residents also can determine whether they received an incorrect tax on HealthCare.gov ("Your Money," New York Times, 2/24).

Hatch Responds

Senate Finance Committee Chair Orrin Hatch (R-Utah), who on Monday sent a letter to the Treasury Department requesting information about how the error occurred, called the decision "yet another example of the administration covering [its] tracks to avoid the political fallout of mistakes made in executing their own law." He added, "Unilateral action such as this deserves further scrutiny by Congress."

According to Politico, Hatch's committee will hold an oversight hearing on the issue soon (Politico, 2/25).