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IRS OFFERS PENALTY RELIEF

The Internal Revenue Service has issued a notice that provides some tax relief for taxpayers that received an over payment of premium tax credits for buying health insurance through Obamacare.

Notice 2015-09 offers limited relief for taxpayers Who have a balance due on their 2014 income tax return because of the trade off in balancing the tax credit Advanced versus the tax credit allowed.

Specifically, the relief granted is the potential to waive the penalty imposed for late payment of the balance due.

Beginning in 2014 and eligible individual who is covered under A qualified health plan through the affordable care act is allowed a premium tax credit. The amount of the advance credit payment is determined when the individual enrolls in the qualified health plan. The credit is based on projected income expenses for the coming year.

When preparing your tax return The credit is then determine based upon actual income and expenses for the year.

You are then required to compare The amount of the tax credit allowed on the actual return with the advance credit payments.. Changes in your circumstances could alter the amount of the credit which could result in either a smaller refund or a larger balance due.

The service said it would abate (forgive) the penalty for 2014 taxpayers who are 1. Current with their filing and payment obligations. 2. Have a balance due as a result of the reconciliation. And 3. Report the amount of excess advance credit payments on the 2014 return, filed timely.