QUESTION

I filed my taxes but I still received a "Failure to Reconcile" notice from the IRS. What should I do?

Individuals with no coverage | Individuals with coverage | Eligibility for Premium Tax Credits and Cost-Sharing Reductions Individual and Marketplace Health Coverage
ANSWER

When you receive advance premium tax credits (APTCs) through the marketplace, you are required to file an income tax return including IRS form 8962 to reconcile the APTCs that were paid on your behalf. If you don't fulfill this requirement, you may receive what is known as a "Failure to Reconcile" notice, which will warn you that you may lose your APTCs if you do not file your income tax return. However, due to the impact of the COVID-19 pandemic, for plan years 2021 and 2022, you will not lose eligibility for premium tax credits if you did not reconcile your prior year’s premium tax credits. (CMS, Failure to File and Reconcile (FTR) Operations Flexibilities for Plan Years 2021 and 2022 - Frequently Asked Questions (FAQ))

If you did file your return with IRS Form 8962, sometimes the Failure to Reconcile notice gets mailed out to people inadvertently because of IRS data delays. If you’re in this situation, you should log back into your marketplace application and attest to having filed your tax return. A question appears asking if you reconciled your APTCs on your tax return for the past year, and you can attest, under penalty of perjury, that you did in fact file a tax return and reconcile past APTCs for all applicable years.

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