IRS Urged to Digitize 1095-A Forms for 17M Americans Using Premium Tax Credit
The Affordable Care Act introduced the Premium Tax Credit (PTC) to aid low and moderate-income individuals in affording health insurance. Around 17 million Americans benefit from this credit annually. However, the process of filing taxes involving PTC is still largely manual, with the IRS not providing 1095-A form data in a machine-readable format.
The 1095-A form, detailing PTC amounts, is currently only available in paper format. This requires manual data entry for tax filing, unlike other forms like W-2s and 1099s. Last year, over 124 million individual income tax returns were filed electronically, highlighting the need for digitization.
The IRS and state health exchanges continue to send these forms via mail, a slow and costly process. To streamline the tax filing process, the IRS should ensure that PTC data is available in machine-readable formats for electronic tax preparation and filing. If government agencies do not take action, Congress should intervene.
The IRS should digitize 1095-A forms to align with the electronic tax filing trend. This change would benefit the 17 million Americans eligible for the Premium Tax Credit, making the tax filing process more efficient and less error-prone.
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