Nevadans who received federal tax credits to help pay for health insurance purchased through the state’s online marketplace or exchange in 2014 need to file a tax return showing those credits, officials warn. If they fail to do so, they risk losing subsidies for insurance coverage in 2016.
The Internal Revenue Service is sending warning letters to people who have failed to file federal 2014 tax returns with the insurance credits reported on Form 8962. That form is used to reconcile the amount of credits or subsidies actually paid during the year versus what is allowed under the Affordable Care Act, also known as Obamacare, based on a person’s income.
The requirement to file a return applies to everyone who received credits, even if they would not otherwise be required to file a return.
Because eligibility for credits for coverage in 2016 will be determined during an enrollment period that starts Nov. 1, consumers who have received the IRS letter should make sure that they file their 2014 tax return with Form 8962 electronically as soon as possible.
“The IRS is advising that processing of returns can take up to six weeks, so we are urging anyone who received a letter or who has questions to contact us right away,” said Bruce Gilbert, executive director of the state’s health insurance exchange.
Nevadans who have questions about the tax-return requirements are encouraged to contact the Silver State Health Insurance Exchange’s customer assistance center at 1-855-768-5465 or via email at Contact@exchange.nv.gov.
“Folks who historically haven’t filed (a tax return) or who filed for an extension (to submit a return) can get caught up in this,” Gilbert said in an interview. “We want to make sure that doesn’t happen.”
Gilbert said forecasts show that as many as a third of the people who obtained the credits or subsidies may have failed to meet the tax-return requirements. Some of them may be used to submitting a simple tax return and unaware of the need to file the specific form for the credits, he said.
“That’s why we’re taking pains to push this information out,” he said.
“We’ll help them get the paperwork done. It’s not the consumer’s fault because this was not well thought out.”
Gilbert acknowledged that consumers have had problems getting help from the state insurance exchange in the past. He said that is no longer an issue because the exchange has enough staff at its assistance center to handle the job.