Senior Policy Analyst
Marketplace enrollees who received a premium tax credit last year to help them afford health coverage but haven’t filed a 2014 tax return showing that they got the right amount can still act to keep their subsidies for 2016 coverage.
People who receive the tax credit must file a tax return for that year to compare (or “reconcile”) the credit they received in advance based on their projected income with the final credit for which they’re eligible based on their actual income. If they don’t, they won’t be able to get the credit in future years.
So, while people who got the credit in 2014 but didn’t file a tax return can still enroll in marketplace coverage for 2016, they won’t get another credit unless they file a return and update their marketplace application. Federal marketplace participants who attest that they’ve filed a return will receive the credit if they’re otherwise eligible. State-based marketplaces may offer a similar opportunity for people to attest to tax filing.
More than 1.8 million people who received an advance premium tax credit hadn’t reconciled the credit on their tax return as of the end of May. Some asked for more time to file, some filed but didn’t include the form reconciling the advance credit they received (Form 8962), and some didn’t file at all.
Because the premium tax credit was new in 2014, confusion about the need to file isn’t surprising. Many people who aren’t regular tax filers, such as those with incomes below the amount that requires filing, may not have understood the filing obligation related to the advance credit. Others might have been stymied by delayed or incorrect copies of Form 1095-A they received from the marketplace, which they need to complete Form 8962.
Many non-filers as of May likely have since filed their tax returns and will have no problem claiming an advance credit for 2016. But consumers who haven’t yet filed should do so now and then return to the marketplace to re-enroll. That will enable them to continue getting help paying for health coverage.