IRS Shares Success Of Premium Tax Credit Calculations For 2015
The 2015 tax year was a transitional one in the world of health care as the Affordable Care Act modified several procedures in the way of filing for health care coverage acknowledgment and credits. The premium tax credit being a major one, as most claiming this credit were doing so for the first time ever in 2015.
The IRS’ margin of error could theoretically be great, leaving a window of opportunities for miscalculations and even potential fraud. However, in a report released by the Treasury Inspector General For Tax Administration (TIGTA), the IRS was more precise than you might think.
The premium tax credit was initially designed by the ACA in an effort to lighten the financial burden of lower income individuals and families who would be purchasing health insurance for the first time via the Health Insurance Marketplace. Oftentimes that credit is distributed in advance, leaving room for overpayment. However, the report for the 2015 tax year reflects 93% accuracy on behalf of the IRS with regard to their PTC predicted calculations.
While this is a major milestone for the IRS, a look at the previous tax year would explain their need for accuracy. For the 2014 tax year, a number of calculation and computer errors led to discrepancies in over 15% of the returns. This was due largely in part to the IRS’ failure to factor in data received between 1/20/15 and 3/29/15.
Fraudulent credit claims were also a possible reason for the discrepancies. The TIGTA expressed in their report that an audit of those 15% (around 28,000 of the 183,000 tax returns) should be reinvestigated to resolve such errors. While the IRS is still getting adjusted to ACA mandates like the rest of us, a positive outcome from one tax year to the next reflects a significant adjustment in the IRS’ calculation procedures.
To read the full report, click here.
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