Be Aware... Uncle Sam!

If you were eligible and exercised your right to Premium Tax Credits (PTC) or Advanced Premium Tax Credits (APTC) after COVID-19 from 2021 - 2023 and failed to file your taxes and reconcile previous advanced payments with APTC and/or PTC, then you may be at risk of losing the privilege of Premium Tax Credits altogether.

This initiative comes after the disastrous turmoil of COVID-19 left a mark on the health of Americans. The COVID-19 Public Health Emergency (PHE) was created in response to mitigate the damage, but the damage had already been done. State Health Exchanges were offered the option to participate in the American Health Rescue Plan of 2021, but this was no obligation. In fact, many states challenged the AHRP as they did not feel Congress had the authority to enforce this mandate. Among those states was Missouri who filed a suit against the suggested plan, but this is another story for another day.

State Exchanges and the IRS are in tandem in the Plan Year (PY) 2025 for implementing the requirement for tax filers to reconcile and file previous consecutive tax year obligations, otherwise, the privilege of your APTC may be forfeited. After your first year of failing to file the taxes, you will be allowed to reconcile at the time of application of health coverage through the marketplace. Consumers will be notified prior to the Open Enrollment Period along with regulators that an individual has or has not reconciled their tax obligations prior to coverage of PY 2025. Following your first notice, you will continue to receive the Premium Tax Credits through the plan year. If you go another year and you still have not filed and reconciled, you will lose the Premium Tax Credit privilege the next month after the Open Enrollment Period is completed for the coming Plan Year.

Note that each state may have their own regulations around this matter, but it’s safe to say that each state will be enforcing this new regulation in their own regard as of November 1st, 2024.

This is not legal, or tax advice and you will need to consult a tax professional for assistance with filing your IRS Form 8962-2024.

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