Taxpayers who’ve filed their 2014 returns only to learn that the government provided them with erroneous information on health-care subsidies won’t be required to submit corrected returns, the Treasury Department said Tuesday.
The decision amounts to a reprieve from paperwork headaches for an estimated 50,000 early filers, out of a pool of some 800,000 HealthCare.gov customers affected by a tax-reporting goof disclosed last week.
The majority who haven’t yet filed their tax returns are still being urged to wait until they receive corrected information from the federal Health and Human Services department.
The announcement means those who have filed would save time, effort and any additional tax-preparation fees for correcting returns with erroneous details. “The IRS will not pursue the collection of any additional taxes from these individuals based on updated information in the corrected forms,” said the Treasury statement.
A Treasury official said the government determined that the errors are not significant enough to require taxpayers to re-file returns already submitted.
Some of the mistakes favor the government, while others favor the taxpayer. Treasury officials believe it’s basically a wash.
Obamacare provides subsidized private health insurance to people who don’t have access to coverage on the job. Because those subsidies are delivered as a tax credit, people who benefit from them have to account to the IRS that they got the correct amount they were legally entitled to.
That’s done on the yearly tax return, with the help of a new form called a 1095-A. It’s like a health care W-2 for people who got subsidized coverage under Obama’s law.
But HHS officials disclosed Friday that forms sent to about 800,000 people contained mistaken information.
The tax-document mistake was a self-inflicted wound after what Obama had personally touted as a successful open-enrollment season, with about 11.4 million people signed up for 2015 coverage.
HealthCare.gov said in a blog post that the federal mistake happened when information on this year’s premiums was substituted for what should have been 2014 numbers. Those premium numbers were for a “benchmark plan” used to calculate subsidies.
People can check by logging in to their accounts at HealthCare.gov, where they should find a message indicating whether they were affected or not. They also can check by phoning the federal customer-service center at 800-318-2596.
Treasury also offered some guidance for taxpayers who’ve already filed to see if they may benefit from resubmitting their 2014 returns:
If the corrected “benchmark” premium is higher than the incorrect premium, it may be worth re-filing. In an example it provided, Treasury used a $100 difference between the corrected premium and the incorrect one. Individuals were advised to consult their tax preparers.
However, it may not be worth the trouble if the difference is slight.
Federal authorities are also considering a fix for people affected by state-level tax-reporting errors. California announced it had made mistakes on forms sent to 100,000 residents.