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Financial Planning > Tax Planning

PPACA exchange users slow to file taxes

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Early Internal Revenue Service (IRS) numbers for the latest tax season support the idea that public health insurance exchange users may be having trouble with filing returns.

The Treasury Inspector General for Tax Administration (TIGTA), an agency that keeps tabs on the IRS, has posted data showing that, as of March 6, the IRS had received 66.7 million individual returns, and about 737,000 returns with information about use of exchange premium tax credits.

In a normal year, the IRS gets about 150 million individual and family tax returns.

Figures from the U.S. Department of Health and Human Services (HHS) and other sources indicated that the exchange system may have received plan selection information for more than 8 million people throughout the year, that about 7 million people may have paid for coverage, and that about 5 million to 6 million people may have used the Patient Protection and Affordable Care Act (PPACA) premium tax credit to pay for coverage.

If households receiving a premium tax credit had an average of 1.5 to 2 members per household, there may be a total of about 2.5 million to 4 million households that received premium tax returns at some point in 2014.

As of March 6, the number of households that had filed tax returns for 2014 was equal to about 45 percent of the 150 million households that file tax returns in a typical year.

By March 6, it appears that only about 18 percent to 30 percent of premium tax credit households had filed 2014 tax returns.

Nina Olson, the national tax advocate, testified that the number of calls coming into the IRS about PPACA problems has been lower than expected.

Analysis of Web-based tax forums has suggested that the volume of questions about a common PPACA tax form, the 1095-A notice, has been relatively light and rose only slightly in April.

In March, H&R Block suggested that it was seeing fewer customers with premium tax credit information than it expected, and that the low volume of customers with tax credit information to report might be the result of consumer confusion about PPACA and premium tax credits.


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