You Must File Your 2014 Return To Get Your 2016 Insurance Subsidy!
The Affordable Care Act provides a number of new benefits for many Americans, but in order to access these advantages, there are certain procedures that must be followed. One of the things that the over one million taxpayers who received a health insurance premium subsidy are required to do is to file their 2014 tax return in order to receive it again in 2016.
Obamacare has established the opportunity for people to lower the amount that they have to pay for their insurance premiums. The way it works is that the government provides an advance payment of their Premium Tax Credit directly to their insurer. Though the original amount of this payment was based on an estimate, the government then looks at the actual income that is represented on the taxpayer's annual tax return and determines whether the subsidy that was received was correct, too low, or too high. If the subsidy was too low then the government will send you the difference as a tax refund. If the amount that the government paid was too high then you probably have to pay an additional amount in taxes.
The only way that the government is able to determine whether the Premium Tax Credit that was provided was accurate or not is through the number submitted on the 2014 tax return, and if you did file it yet, you are not alone. According to the Internal Revenue Service, among those who received a Premium Tax Credit there are approximately 710,000 people that have not yet sent in their return or indicated that they need an extension, and from that group there are also roughly 360,000 who have asked for an extension. That means that there are over one million people that the IRS can't yet calculate whether the Premium Tax Credit was accurate or not. This represents a sizable problem, as the only way for the Marketplaces to determine whether a taxpayer is eligible to receive an advance Premium Tax Credit for tax year 2016 is based upon the information on the 2014 tax return. That needs to be done by fall of 2015, which is fast approaching.
If you are among the one million Americans who received a Premium Tax Credit for 2014 and who have not yet filed your tax return for that year, you are strongly advised to get your paperwork in so that there is no interruption in your ability to receive this subsidy. Those who fall into this category will be receiving notification from the Internal Revenue Service soon, encouraging them to file their returns. Those who receive this letter will have thirty days from the date it was sent to comply.
Though Obamacare was designed to make having insurance easier and more affordable, some of the documentation requirements are complex, and many people find that they need professional help to get the paperwork done correctly and on time. Whether you have not yet gotten your paperwork in because you found it too challenging, or even if you don't have the money available to pay right now, the government takes a dim view of those who do not file a tax return. This is even more important this year than in the past, because failure to get your paperwork in can leave you without insurance, and you can be penalized for this as well as for not having paid your taxes. Our St. Petersburg tax office has encountered many confused taxpayers. Whatever you do, act quickly to make sure you receive the credit in the future.