Recipients of tax credits and/or subsidies through Covered California recently received a reminder via US Mail to report changes in income:
Enrollees who received premium assistance this year will need to file taxes for 2014. When they file, the IRS will check to see if the amount of income they reported to Covered California is the same as the amount of income they actually made. The IRS will also check to see if their family size is the same as when they applied. The IRS will compare, or “reconcile,” the amount of premium assistance they qualify for based on their actual income and family size reported on their tax return with the premium assistance they received during the taxable year.
Enrollees who experienced a change in income or household size but have not reported this information to Covered California are at risk of having to pay more at tax time. If needed, Covered California can work with these enrollees to reduce their current premium assistance to minimize this consequence.
A copy of the reminder letter can be downloaded here.
We recommend all individuals and families who are receiving a tax credit and/or subsidy, to review the FAQ on how the IRS will reconcile your income tax return with the credits received.
Remember – recipients of tax credits must file their 2014 income tax return by the April 15, 2015 deadline, without an extension.