California's Obamacare exchange has sent out 120,000 corrected tax forms, but it said tens of thousands of other consumers are still waiting for their information.
Peter Lee, executive director of the Covered California exchange, said those remaining households should get tax forms related to their health-law subsidies by the end of March.
"We are very sorry for the inconvenience this has caused for too many consumers," Lee said. "This is far from ideal."
Friday, the U.S. Treasury Department announced that taxpayers who got incorrect information from state exchanges such as Covered California won't be required to submit corrected returns if they have already filed their taxes.
The Treasury had previously offered the same reprieve for people in the 37 states served by HealthCare.gov, the federal exchange.
At issue is Form 1095-A, which health-law exchanges must send to individuals and families showing how much money they received in 2014 from the federal government to subsidize their health insurance premiums.
Lee applauded federal officials for extending the same leeway to consumers using state exchanges.
"The Internal Revenue Service will not pursue collection for any additional taxes. This is a very big deal," Lee said.
Conversely, Lee said, taxpayers are free to file an amended return if their tax form indicates they are due money back.
These problems and the delays in getting answers have frustrated thousands of Californians who have wanted to complete their tax forms and find out whether they owe money to Uncle Sam or stand to receive a refund.
Consumers may have to repay some portion of their government subsidy as part of their tax return if their income was higher than what they estimated during enrollment. Others who qualified for more government assistance in 2014 could get a refund.
Covered California said it sent incorrect information on some forms because its customer data didn't match what health plans had on file.
For instance, there may have been a discrepancy for the person's length of coverage in 2014 and amount of subsidy received. Overall, Covered California sent out nearly 900,000 tax forms.
Lee cautioned that the exchange is still sorting through numerous files and some forms might not be available until after the tax filing deadline of April 15.
"This is the first tax season ever that healthcare and taxes are interwoven," Lee said. "We are learning from this."