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Some taxpayers will be receiving an IRS letter about the premium tax credit. Be sure to read your letter carefully and respond timely. Do not file a Form 1040X, Amended U.S. Individual Income Tax Return as it can delay any refund that you may be due – the IRS has a special department for letter 12C. Once you respond to the letter, the IRS uses the information you provide to process your tax return. And recalculate your refund or your balance due.
You can mail or fax your response. Be sure to include a copy of the letter with your response. Use the mailing address or fax number in the letter to respond. But only pick one – you shouldn’t fax and mail as it can confuse the IRS processing center and seriously delay your refund. Unfortunately mailing will take longer but, as the IRS will inform you in Letter 12C, they can not verify the receipt of your fax. Include a signed, dated and corrected copy of your tax return. Be sure to include a copy of your 1095a. And your 8962. You may also want to recalculate any necessary estimated tax payments due for the year and visit the healthcare marketplace to correct your advanced tax credit payments.
The IRS sent you this letter because the Health Insurance Marketplace notified us that they made advance payments of the premium tax credit on your behalf to your, or your family’s, insurance company last year. The IRS will NOT be able to provide you a copy of your 1095-A, even though they have received it and are using the information on this form to hold up processing your return. They want you to Call the healthcare marketplace and request a copy. I personally would rather call Comcast about a service issue. Try going online to recover your 1095A at least a dozen times before calling. If you have received multiple amended 1095-A’s and aren’t completely sure what to do, Contact Us.
You also received this letter because — when you filed your individual 2015 tax return — you didn’t reconcile the advance payments of the premium tax credit. To reconcile, you use Form 8962, Premium Tax Credit, to compare the advance payments with the amount of your credit. You should be able to locate last years 2nd lowest cost silver plan online at the marketplace for your state, as well as the minimum essential coverage bronze plan. Also be sure to check if your monthly expense exceeded 8.05% of your monthly income as you may qualify for an exemption from coverage for any month you did not have coverage potentially reducing your exposure to the Shared Responsibility payment brought to you by the Unaffordable Care Act.
Filing your tax return without including Form 8962 will delay your refund and can prevent you from receiving advance credit payments in future years. They IRS will levy any ACA penalties assessed against your account from future refunds.
You must respond to the letter, even if you disagree with the information in it. If you disagree, send the IRS a letter explaining what you think is in error. If you received this letter, but didn’t enroll in health insurance through the Marketplace, you must respond to the letter and let the IRS know. Failure to respond to this letter can lead the IRS assessing you a penalty and collecting this penalty from your future refunds as well as excluding you from future credits to assist in getting health insurance from the marketplace.
The letter outlines the information you should provide in your response, which includes:
• Copy of the Form 1095-A, Health Insurance Marketplace Statement that your Marketplace provided to you earlier this year. Probably after you filed your tax return.
• Completed Form 8962.
• Second page of your tax return, which includes the “Tax and Credits” and “Payments” sections, showing the necessary corrections and your signature. You must complete either the line for “excess advance premium tax credit repayment” or the line for “net premium tax credit.”
If you originally filed a Form 1040EZ tax return, you must transfer the information from your Form 1040EZ to a Form 1040A and include it with your response to the 12C letter.
If you need your Form 1095-A, you should contact your Marketplace directly. The IRS does not issue and will not provide that information to you.
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