Schedule 2  1040 Additional Taxes

• Part I Tax
  • 2 Excess advance premium tax credit repayment. Attach Form 8962
• Part II Other Taxes
  • 4 Self-employment tax. Attach Schedule SE
  • 5 Social security and Medicare tax on unreported tip income. Attach Form 4137 
  • 17 Other additional taxes:

What to Do if You Get a 12c #Letter about the Premium Tax Credit
or your missing form 8962?

If you get a IRS Letter 12C  about the Covered CA premium tax credit, read further, here’s what it’s all about.

Why am I getting this letter?

The IRS sent you this letter because Covered CA notified them that they made advance payments of the premium tax credit – subsidy on your behalf to your or your family’s insurance company last year.

• You also received this letter because – when you filed your individual  tax return – you didn’t reconcile the advance payments of the premium tax credit, using form Form 8962,
• VIDEO on Missing IRS 12 C or 8962

What do I need to do now?

More detail

• You must respond to the letter, even if you disagree with the information in it. If you disagree, send the IRS a letter explaining what you think is in error.
• If you received this letter, but didn’t enroll in health insurance through Covered CA, where you can have a broker at no additional charge, you must let the IRS know.
• The letter outlines the information you should provide in your response, which includes:

• • A copy of the Form 1095-A, where Covered CA shows the subsidies you got for the year.
  • A completed Form 8962
  • The second page of your tax return, which includes the “Tax and Credits” and “Payments” sections, showing the necessary corrections and your signature. You must complete either the line for “excess advance premium tax credit repayment” or the line for “net premium tax credit.”

• If you originally filed a Form 1040EZ tax return, you must transfer the information from your Form 1040EZ to a Form 1040A and include it with your response to the 12C letter.

Is there anything else I need to know?

• If it’s Covered CA we can do that for you, when you appoint us as your agent – here’s instructions.
  • If you need your Form 1095-A, you should contact Covered CA or you can have a broker at no additional charge  directly.
• The IRS does not issue and cannot provide that information to you.
• Do not file a Form 1040X, Amended U.S. Individual Income Tax Return. Once you respond to the letter, the IRS uses the information you provide to process your tax return.
• You can mail or fax your response. Be sure to include a copy of the letter with your response. Use the mailing address and fax number in the letter to respond.
• For more information about the health care law and the premium tax credit, visit IRS.gov/aca for more information.  Tax Tip 2016-43

Understanding Your Letter  12C

Even More detail

Requesting information to reconcile Advance Payments of the Premium Tax Credit

We are sending you this letter because:

• Covered  CA notified the IRS  that they made advance payments of the premium tax credit to your or your family’s health insurance company to reduce your premium costs and
• you didn’t include the Form 8962, Premium Tax Credit, to reconcile the advance payments that were paid on your behalf when you filed your individual 2015 tax return.

When the Health Insurance Marketplace pays advance payments of the premium tax credit on your behalf, you must file Form 8962 to reconcile the advance payments to the actual amount of the Premium Tax Credit that you are eligible for based on your actual household income and family size. You must use the Form 1095-A, Health Insurance Marketplace Statement, sent to you from your Health Insurance Marketplace to complete Form 8962.

If you don’t reconcile:

If you don’t reconcile, you won’t be eligible for advance payments of the premium tax credit or cost-sharing reductions Enhanced Silver to help pay for your Covered CA health insurance coverage for the following calendar year.

What you need to do

• Read your letter carefully and respond timely.
• You must respond to the letter, even if you disagree with the information in the letter. If you disagree, send us a letter explaining what information you think is in error. If you didn’t purchase a health insurance policy from the Marketplace, you must let us know.
• Provide the information requested in the letter. This includes:
  • a copy of your Form 1095A provided by your Marketplace,
  • a completed Form 8962
  • a copy of the corrected second page from your original return that shows the “Tax and Credits” and “Payments” sections. You must complete either the line for “excess advance premium tax credit repayment” (line 46, Form 1040, or line 29, Form 1040A) or the line for “net premium tax credit” (line 69, Form 1040, or line 45, Form 1040A).NOTE: If you originally filed a Form 1040EZ tax return, you must transfer the information from your Form 1040EZ to a Form 1040A and include it with your response. Form 1040EZ does not have the designated lines needed to carryforward amounts from a Form 8962.
• You should have received a Form 1095-A from your Marketplace. If you didn’t receive your Form 1095-A, log in to your HealthCare.gov or state Marketplace account or contact your agent or Covered CA  directly. The IRS cannot answer questions about the information on your Form 1095-A, reissue missing/lost forms, or issue a corrected form.
• Do not file a Form 1040X, Amended U.S. Individual Income Tax Return. After we receive the requested information, we’ll use it to process your original tax return.
• If you’re entitled to a refund after reconciling your advance payments, we’ll send your refund about 6-8 weeks after we receive all of the necessary information.

How to respond

Your Letter 0012C provides a fax number, if you want to send the information by fax. If you prefer to mail your response, send the information to the address listed at the beginning of the letter. Also, include a copy of the letter with your response.

You may want to

• Visit www.irs.gov/aca for more information about filing a tax return with form 8962
• Call us at 1-866-682-7451, extension 568, if you have additional questions.
• irs.gov/understanding-your-letter-12c
• Fax # for responses Follow this link to taxact.com

Eligibility for other health coverage MEC Minimum Essential Coverage,  makes you #ineligible for subsidies

FAQ’s

• I have coverage with “Medi Cal?” as I’m taking care of my Mom under In Home Supportive Services IHSS.  Can I keep my Covered CA subsidies APTC?
  • It’s my understanding [I’m not a CPA or Attorney] that if one has coverage or is eligible for coverage with MEC Minimum Essential Coverage, then they wouldn’t qualify for subsidies. You are mandated to report MEC to Covered CA.
    • Here’s a VIDEO to explain all the reasoning.
    • It’s a stretch, maybe you could argue that LA Care is NOT MEC, based on the huge fine they just got! See LA Times article.
• What is Minimum Essential Coverage (MEC)?
  • MEC includes the following.
    • • Individual market coverage (including qualified health plans).
      • Most coverage through government-sponsored programs (including Medicaid [Medi Cal] coverage, Medicare Part A or C, the Children’s Health Insurance Program (CHIP), certain benefits for veterans and their families, TRICARE, and health coverage for Peace Corps volunteers).
      • Most types of employer-sponsored coverage.
      • Grandfathered health plans.
      • Other health coverage designated by the Department of Health and Human Services (HHS) as MEC.
    • MEC does not include coverage consisting solely of excepted benefits. Excepted benefits include vision and dental coverage not part of a comprehensive health insurance plan, workers’ compensation coverage, and coverage limited to a specified disease or
      illness.
    • For more information on what is MEC, see our webpage or  irs.gov/Individual-Shared-Responsibility-Provision
    • Your MEC may be reported to you on Form 1095-A, Form 1095-B, or Form 1095-C.
• MEC eligibility when you have Covered CA does not automatically discontinue APTC.
  • If an individual in your tax family is enrolled in a qualified health plan for which APTC was made and the individual is or will soon become eligible for other MEC, you must report – notify the Marketplace – Covered CA about the other MEC and that the APTC for the individual’s coverage should be discontinued. If the Marketplace does not discontinue APTC for the first calendar month beginning after the month you notify the Marketplace, the individual is treated as eligible for the other MEC no earlier than the first day of the second calendar month beginning after the first month the individual may enroll in the other MEC.
  • A different rule applies to Medicaid and CHIP eligibility, discussed later under Government-Sponsored Programs Publication 974 Page 9
  • You could waive your coverage with PASC-SEIU Homecare Workers Health Care Plan, but that won’t help, the key word is eligibility.
    • More FAQ’s on Union’s website
  • Our webpage on Minimum Essential Coverage
  • For purposes of the PTC, a qualified health plan is a health insurance plan or policy purchased through a Marketplace [Covered CA] at the bronze, silver, gold, or platinum level. Throughout this publication 974, a qualified health plan is also referred to as a “policy.” Catastrophic health plans and stand-alone dental plans purchased through the Marketplace, and all plans purchased through the Small Business Health Options Program (SHOP), are not qualified health plans for purposes of the PTC. Therefore, they do not qualify a taxpayer to take the PTC Publication 974 Page 7