Tax Law and News Enrolling in ACA Workplace Coverage can be Costly, but can be an Avoidable Tax Hit to Employees Read the Article Open Share Drawer Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on LinkedIn (Opens in new window) Written by Mike D'Avolio, CPA, JD Published Aug 26, 2016 2 min read At the time they are hired, employers should remind their employees to adjust their income with the Healthcare Marketplace if they are retaining their Affordable Care Act coverage. Also, marketplace premium assistance should be turned off when employees are enrolling in workplace benefits. There are a significant number of tax filers unaware that they have accrued an Advance Premium Tax Credit (APTC) or subsidy. Tax returns are being held by the IRS due to missing a Form 8962, Premium Tax Credit, which is required to reconcile the advance premium tax credit. Taxpayers may be unaware they still had marketplace coverage due to being automatically re-enrolled by Healthcare.gov or a state marketplace. Some low-cost plans require no additional contribution by the individual, as the APTC is transmitted directly to the health plan. Some enrollees are not using the marketplace coverage because they have workplace benefits. If the employee’s income is not adjusted with the marketplace after hiring, he or she will have to repay some or all APTC and this will result in a smaller refund or additional tax owed. The latest IRS figures indicate that 51 percent of filers had hit the income cap and this results in no APTC. Taxpayers had to repay an average of $860 to the government. If the taxpayer is unaware he or she still had marketplace coverage, the taxpayer is responsible for repaying APTC even though the subsidy went to the insurance carrier and marketplace health plan was not used. There are numerous cases of modest income taxpayers owing thousands of dollars back to the government. The marketplace matching records with the employer usually occurs only at first enrollment with the marketplace and not when the employee enrolls into employer coverage. IRS Resources: Individuals and Families Tax Professionals What’s Trending Healthcare Tax Tips Questions and Answers Previous Post September 2016 Tax and Compliance Deadlines Next Post Tax Law Changes for TY 2016 – Part 1 Written by Mike D'Avolio, CPA, JD Mike D’Avolio, CPA, JD, is a tax law specialist for Intuit® ProConnect™ Group, where he has worked since 1987. He monitors legislative and regulatory activity, serves as a government liaison, circulates information to employees and customers, analyzes and tests software, trains employees and customers, and serves as a public relations representative. More from Mike D'Avolio, CPA, JD Comments are closed. Browse Related Articles Tax Law and News IRS Addresses Eligibility for Premium Tax Credit While … Tax Law and News Tax Year 2016 Changes Related to the Affordable Care Ac… Tax Law and News ACA Requires New Form 1095 Source Documents Tax Law and News What Does the Affordable Care Act Have to do With Tax R… Tax Law and News Tax Year 2015 Changes to the Individual Provisions of t… Tax Law and News Open Enrollment for Marketplace Plans Ends Jan. 31, 201… Tax Law and News Affordable Care Act Update: New Information About Form … Tax Law and News Centerpiece Provision of the ACA – The Premium Ta… Tax Law and News ACA and Employers: How Workforce Size Affects Responsib… Tax Law and News Your Clients’ ACA Reporting Burden is Ripe for Automa…