Received 1095-C After Filing Taxes? Here’s What to Do Next

Receiving a Form 1095-C after filing taxes might raise questions about whether further action is required. This form, related to employer-provided health insurance, can impact your tax return if its details are not accurately reflected. Understanding how to address this situation ensures compliance and avoids discrepancies with the IRS.

Significance of Form 1095-C

Form 1095-C is a document for individuals with employer-provided health insurance, issued under the Affordable Care Act (ACA). It outlines key details such as the type of coverage offered, the months it was available, and the individuals covered. The IRS uses this information to verify compliance with the ACA’s employer mandate, which requires large employers to provide minimum essential coverage to full-time employees.

While the federal individual mandate penalty is no longer enforced, Form 1095-C remains relevant for state-level mandates in places like California and New Jersey. It can demonstrate compliance with these requirements and influence eligibility for premium tax credits for those purchasing insurance through the Health Insurance Marketplace.

Checking Your Return for Accuracy

If you receive a Form 1095-C after filing your taxes, review your return to ensure the health insurance information matches the form. Pay attention to months where coverage was reported as unavailable, as this could affect eligibility for tax credits or state-level penalties. Compare the details of the form with your return to identify any discrepancies.

Discrepancies may result from timing issues or clerical errors. For example, if your employer reported a different start date for coverage, cross-reference this with pay stubs or employer communications. Double-check that Social Security numbers and other identifiers are accurate to avoid IRS processing delays.

When an Amendment Might Be Necessary

If significant discrepancies exist between your tax return and Form 1095-C, you may need to file an amended return. For instance, if you incorrectly claimed a premium tax credit based on inaccurate coverage information, this could alter your tax liability. Use Form 1040-X to amend your federal return, and note that amendments must generally be submitted within three years of the original filing date.

State-level mandates may also require amendments. Each state has unique procedures and deadlines, so consult specific guidelines. For example, California may necessitate a separate amendment if discrepancies affect state healthcare mandates. Aligning federal and state returns with your 1095-C will help avoid complications.

Potential Changes in Tax Liability

Receiving a Form 1095-C after filing taxes can affect your tax liability, particularly concerning premium tax credits. If the form indicates employer-sponsored coverage for more months than initially reported, this could reduce or eliminate your eligibility for the credit, increasing your tax obligation. Conversely, if coverage was not provided as claimed, you might qualify for a larger credit, potentially resulting in a refund.

Such changes can also arise if you underestimated your income when applying for marketplace coverage. Receiving a larger premium tax credit than entitled may lead to repayment obligations when reconciling your return. Although the ACA caps these repayments based on income, they can still impact your financial situation.

Proper Recordkeeping for Future Filings

Accurate recordkeeping is essential, particularly with documents like the 1095-C. While the form itself is not submitted with your tax return, it substantiates your health coverage status. Retain it along with related documents, such as employer correspondence, pay stubs showing healthcare deductions, and prior tax returns, for at least three years. This aligns with the IRS statute of limitations for audits and amendments.

Organizing records systematically simplifies future tax filings. Digital tools like tax software or cloud-based storage can securely store and categorize documents. Label files by tax year and type—for example, “2023 Health Coverage”—to facilitate retrieval during tax preparation or in case of discrepancies. If moving between states with different healthcare mandates, maintaining these records ensures compliance with varying requirements. For instance, Massachusetts requires proof of coverage for its individual mandate, making prior 1095-C forms valuable for meeting such obligations.