Obamacare customers won’t be able to file their tax returns next year until the government sends them a form detailing their coverage and tax credits, and if those forms are late some taxpayers could face a delay in seeking their refunds.
Federal and state officials said they’re working on the forms, known as the 1095A, and vowed to meet the Jan. 31 deadline for issuing them. But some tax professionals are skeptical, citing the administration’s iffy track record on being able to meet other deadlines in the massive health overhaul law.
“It really strains credulity to think 1095A is not going to be a big problem,” said George Brandes, vice president for health programs at Jackson Hewitt Tax Service.
Filers need the forms to calculate whether they received the correct subsidy from the government, or if they owe money to cover a difference.
The forms are supposed to be issued around the same time employers issue W-2 forms to their workers detailing their earnings for the year. But some businesses provide their W-2s before the Jan. 31 deadline, and analysts said taxpayers may go ahead and file at that point, not realizing they still need to account for how Obamacare affects their overall earnings.
Mark Ciaramitaro, vice president for health care at H&R Block, said it is “absolutely critical” that Obamacare customers have the form in hand before they do their returns, but he has not seen any evidence there will be a delay in getting them out.
It’s also possible that the exchanges could beat the deadline and issue the forms earlier in January, keeping pace with W-2s.
Tax professionals have speculated about the state and federal insurance exchanges that struggled to implement their web system and their ability to issue the forms, although the Obama administration and states that encountered technical hiccups told The Washington Times they are on track.
“CMS is working to develop the technical processes necessary to ensure the forms are generated accurately and timely,” said Aaron Albright, a spokesman for the Centers for Medicare and Medicaid Services, which oversees the federal exchange.
Tyler Klimas, a spokesman for Nevada’s exchange, which decided to ditch its web platform and rely on the federal HealthCare.gov site for the 2015 enrollment period, said his state will not need help from the federal government to issue the forms.
“We are in the process of creating 1095A forms and will issue them to our enrollees in a timely manner,” he said. “There has been no request for assistance with this process.”
Chuck Lovelace, vice president for affordable care at Liberty Tax Service, said he is not too worried about the forms’ distribution for now.
“Our concern is more that the customer knows what to do with the 1095,” Mr. Lovelace said.
The IRS has released drafts of the forms taxpayers will see next year, but stakeholders are still waiting on instructions that explain how to calculate subsidy amounts to see if they correctly match up with a person’s income.
“Some people will get money back, and some will owe money, which will be an unpleasant surprise,” said Timothy Jost, a law professor at Washington and Lee University.
The IRS is handling most of Obamacare’s tax issues, but the 1095A forms are being issued by the federal health marketplace and the 15 state-run health exchanges.
The web rollout of the federal website, HealthCare.gov, was a disaster last fall and several state-run exchanges had to scrap their web platforms, feeding into concern about what’s next as the second year of enrollment in the exchanges looms.
“As we know, not everything has happened on schedule the way it was supposed to happen,” Mr. Jost said, noting the tax forms will be “vitally important.”
“I hope it happens on time,” he added.