Affordable Care Act Update: Penalty Relief for Excess Advance Premium Tax Credit

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The IRS announced yesterday, that taxpayers who owe money on their 2014 taxes due to an excess advanced premium tax credit , will receive penalty relief if they can’t pay the balance owed.

The notice provides relief in two different ways:

  •  Relief for late payment of balance due
  • Relief from penalty of an underpayment of estimated taxes

Who qualifies for relief?

You qualify for relief if the balance due on your taxes is related to an excess advance premium tax credit payment sent directly to your insurance company to help you pay for health insurance, you are current on tax filing (you have to file your 2014 taxes) and other payment obligations, and you report the amount of excess advanced premium tax credit on your 2014 tax return.

How will you know if you received excess advance premium tax credit?

If you use TurboTax, you will enter your Form 1095-A information just like a W-2. TurboTax will accurately calculate your premium tax credit based on information from your Form 1095-A and your actual income. If advance premium tax credit payments are more than the premium tax credit allowed on your tax return then the excess advanced premium tax credit is treated as an additional tax which may result in a smaller tax refund or a larger balance due.

What is the penalty relief?

  • The IRS will abate or reduce the failure-to-pay penalty for tax year 2014
  • The IRS will also waive the penalty for taxable year 2014 for underpayment of estimated taxes

How do you claim relief?

In order to qualify for penalty relief, you have to file your 2014 taxes.

When you receive a request for payment of your outstanding balance from the IRS, you can respond with a letter containing the statement ”  I am eligible for relief granted under notice 2015-9, because I received excess advance payment.”

As with all tax laws, TurboTax is up to date. If you have questions regarding the advanced premium tax credit and the Affordable Care Act, you can get your questions answered at










Comments (2) Leave your comment

  1. My entire balance due and part of a refund were due to this penalty. I went through all the steps in Turbotax and never found where there was an option to claim this and I don’t understand why Turbotax does not automatically find this. As the deadline is fast approaching, I paid and now am trying to figure out how to claim this. Any ideas?

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