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The government sent incorrect tax information to some 800,000 people who signed up for insurance plans through HealthCare.gov last year. The error is expected to delay the tax returns for about one out of every five people who used the federal insurance marketplace to avoid tax penalties for being uninsured.
If you were one of these enrollees, what do you need to know about the mix-up, and how will it affect your tax filing?
The error occurred in calculating the premiums for consumers who signed up for Obamacare via HealthCare.gov and received subsidies to help purchase insurance in 2014. These tax credits are based on consumers' income and certain insurance premiums.
The problem: Some of the insurance premiums were miscalculated, leading to incorrect information on consumers' tax forms. As of yet, officials are not sure why the miscalculation occurred.
How Will It Affect My Taxes?
Because the tax credit calculation uses a taxpayer's income, and because incomes vary, some people will owe more and some will owe less. There's no way to know until those affected by the error receive updated and accurate tax information.
What Should I Do?
If you enrolled in health coverage through HealthCare.gov, you may want to hold off on filing your taxes just yet. The HealthCare.gov website had this to say:
If your form is affected by this issue, you’ll get a call and email from us in the next few days, and you will get a message in your Marketplace account here on HealthCare.gov. Once you log in, you should select your 2014 application, and then select "Tax forms." You will see a message letting you know if your 1095-A form is being corrected. This is also where you will find your corrected form when it is completed. When the corrected form is ready, we’ll send a message to your Marketplace account.
The department is due to deliver corrected tax data to consumers in the first week of March, and has urged consumers to wait to file their taxes and will provide further information to those who already have.