What Should I Do If I Forgot to File My 1095-C Form?

Forgetting to file your 1095-C form can be stressful during tax season, as it relates to the Affordable Care Act’s requirements. This document confirms your health insurance coverage and ensures compliance with federal mandates. Addressing this oversight promptly is crucial to avoid complications with your taxes or penalties. Here’s what to do if you’ve missed filing this form.

Legal Purpose of the Form

The 1095-C form is essential for U.S. tax compliance under the Affordable Care Act (ACA). Issued by applicable large employers (ALEs), it outlines the health insurance coverage offered to employees, demonstrating the employer’s compliance with the ACA’s mandate to provide minimum essential coverage to full-time workers.

The IRS uses the 1095-C to enforce the ACA’s shared responsibility provisions. It details the coverage offered, the months it was available, and the employee’s share of the lowest-cost monthly premium for self-only coverage. This information determines whether an employer may face penalties for failing to provide adequate health insurance.

For employees, the form helps establish eligibility for the premium tax credit, which applies to those purchasing health insurance through the Health Insurance Marketplace and meeting specific income criteria. The IRS uses the 1095-C to verify if an employee had access to employer-sponsored coverage, affecting their eligibility for the credit.

Amending Previously Filed Returns

If you forgot to include your 1095-C form in your tax filing, you must amend your tax return using Form 1040-X. This form is used to correct previously filed returns by adding omitted information or fixing errors.

Gather all relevant documents, such as your original tax return and the missing 1095-C, to ensure the amendment accurately reflects your financial situation. Provide a clear explanation of the changes made. You can submit amendments electronically or via paper filing, depending on IRS requirements for the tax year in question.

Timing is critical. Generally, you have three years from the date you filed your original return or two years from the date you paid the tax, whichever is later, to file an amendment. If additional taxes are owed, paying promptly can reduce interest and penalties.

Contacting the Relevant Entities

If you need to amend your tax return due to a missing 1095-C form, contact your employer’s human resources or payroll department to request a copy. Employers are required to provide this form to employees by March 2 each year, but delays or errors can happen.

Consult a tax professional for help navigating the amendment process, particularly if your situation involves complex scenarios or multiple tax years. A professional can ensure Form 1040-X is completed accurately and that all calculations are correct. They can also advise on how the amendment might affect your tax credits or deductions.

Possible Penalties

Failing to report accurate health coverage information on your tax return can lead to penalties if discrepancies arise between your filing and the records submitted by your employer. The IRS may impose fines for underreporting income or claiming incorrect tax credits.

Penalties vary depending on the issue’s severity. For instance, failing to file correct information returns can result in fines of up to $290 per return, with a maximum annual penalty of $3,532,500 for large businesses. Smaller entities may face reduced penalties. If the IRS determines that the oversight was due to negligence or intentional disregard, the financial consequences can increase significantly.

Essential Documentation

Having the right documentation is key to addressing any tax-related oversight, particularly with the 1095-C form. This form, along with other relevant documents, is necessary to resolve discrepancies in your tax filings and prove compliance with federal regulations.

Records of Communication

Keep records of communication with your employer, such as emails or letters requesting the 1095-C or discussing discrepancies. These records demonstrate your efforts to resolve the issue. If the IRS requests additional information, having these documents can expedite the process. Similarly, maintain a log of correspondence with any tax professionals for reference.

Supporting Financial Documents

Gather financial documents such as W-2 forms, 1099s, and other tax forms reflecting your income and deductions. A complete set of documents ensures your amended return is accurate and prevents further discrepancies. If your tax situation involves unique circumstances, such as Health Insurance Marketplace coverage or healthcare premium payments, include documentation to support your claims. This thorough approach helps ensure compliance and peace of mind.