Tax bills on the way for many Covered California enrollees who fail to keep up with IRS reporting requirements

If you obtained health insurance offered through an Affordable Care Act (“ACA”) exchange, such as Covered California, did you know that you are required to report changes in income and other life changes to the IRS throughout the year? Hundreds of thousands of Americans will find out the hard way, with a tax bill from the IRS.

Don’t get caught in that unfortunate situation. If you obtained health insurance through Covered California, you likely received a “premium tax credit” to offset the cost of insurance, based on the estimated income you provided. However, if the actual income reported on your tax return next year is different than the estimated income you reported, the IRS may require you to pay back that tax credit. For many, that could be a large unexpected tax bill.

Staying informed of intricacies of the tax code is difficult, but getting caught off guard by the IRS is even worse. If you run into problems with the IRS or Franchise Tax Board, contact Elizabeth A. Tresp, Attorney at Law, today.