IRS Warns Taxpayers Using Premium Tax Credit
In order to continue receiving a Premium Tax Credit you must file income tax returns as soon as possible. Any delay could stop eligibility for advance payments of this credit during the current tax year. Remember, these payments help reduce each month’s health insurance premium. It could also generate notices from the IRS to pay back some or all of prior advance payments of the credit.
Those who use the Affordable Care Act to purchase health insurance on the Marketplace are often eligible to reduce their insurance premium using the Premium Tax Credit. Many had the credit sent directly to their health insurance company each month to reduce their premium. This is called “advance payments of the premium tax credit” by the IRS.
The IRS is now reviews payments of the Premium Tax Credit. To continue receiving the credit you must file tax returns. If you filed an extension and do not plan to file your tax return until October 15th, you could be ruled ineligible for the credit next year because you have not yet filed your tax return.
Your insurance premiums could increase next year if you are ruled ineligible for the advance premium credit payment. This could cause financial hardship. You may be asked to repay prior year Premium Tax Credit Payments as well.
If you received any Premium Tax Credit or expect to do so in the future, you must file tax returns as soon as possible per the IRS.
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