Some Tax Penalty Relief for 1095 Mix-Ups

The IRS is giving clients who got a wrong 1095-A limited relief from tax penalties.

Notice 2015-30 provides limited penalty relief for taxpayers who received a Form 1095-A, Health Insurance Marketplace Statement, that was incorrect or delayed and who timely filed their 2014 income tax return, including extensions.

This notice provides relief from penalties under Section 6651(a)(2) of the Internal Revenue Code for late payment of a balance due; under 6651(a)(3) for failure to pay an amount due upon notice and demand; under 6654(a) for underpayment of estimated tax; and the accuracy-related penalty under section 6662. The relief applies only for the 2014 taxable year.

On Feb. 20, the Centers for Medicare and Medicaid Services announced that about 800,000 tax filers who purchased health insurance from the Marketplace during 2014 received a 1095-A that contained an error related to the premium for the second lowest cost Silver plan (often referred to as the benchmark plan). Within a few weeks, the CMS further announced additional issues with the data used to populate the 1095-A.