Millions of Americans think taxes are daunting. Mix taxes with Obamacare and you have confusion at a whole new level.

This year some taxpayers will be receiving an IRS letter about the premium tax credit. it's known as a 12C letter.

This isn't the kind of letter you throw away with the junk mail. Be sure to read it, respond in a timely manner and get to a tax pro if you don't understand it. Here are answers to questions you may have.

Why are you getting this letter?

The IRS sent you a 12C because the Marketplace notified them that it made advance payments of the premium tax credit on your behalf to your or your family's insurance company last year. You got a 12C letter because when you filed your individual 2015 tax return, you didn't reconcile the advance payments of the premium tax credit.

That basically means you didn't fill out the proper form.

To reconcile, you use Form 8962, Premium Tax Credit, to compare the advance payments with the amount of your credit. This can cause a problem because filing your tax return without including Form 8962 can delay your refund. It can also prevent you from receiving advance credit payments in future years.

What do I need to do now?

First of all, don't ignore the letter. Respond even if you disagree with the information in it and send the IRS a letter explaining what you think is wrong.

If you received this letter, but didn't enroll in health insurance through the Marketplace, let the IRS know.

The letter outlines the information you should provide in your response, which includes:

1. A copy of the Form 1095-A, Health Insurance Marketplace Statement, that your Marketplace sent earlier this year

  1. A completed Form 8962
  2. The second page of your tax return, which includes the "Tax and Credits" and "Payments" sections, showing the necessary corrections and your signature. You must complete either the line for "excess advance premium tax credit repayment" or the line for "net premium tax credit."

Make sure you include all three of these things.

Also, If you originally filed a Form 1040EZ tax return, you must transfer the information from your Form 1040EZ to a Form 1040A and include it with your response to the 12C letter.

Is there anything else I need to know?

  • If you need your Form 1095-A, you should contact your Marketplace directly.
  • Do not file a Form 1040X, Amended U.S. Individual Income Tax Return. Once you respond to the letter, the IRS uses the information you provide to process your tax return.
  • You can mail or fax your response. Be sure to include a copy of the letter with your response and use the mailing address and fax number in the letter to respond.
  • For more information about the health care law and the premium tax credit, visit for more information.

Better yet, get to your tax pro who can handle this for you, while you focus on your business.