IRS will allow people to keep extra money from ObamaCare tax error

People who received incorrect tax information from ObamaCare will be allowed to keep the extra money in their refunds and will not have to refile their taxes, the Treasury Department said Tuesday. 

The Obama administration announced last week that 800,000 people signed up for ObamaCare had received incorrect tax information. Most of those people will be receiving a corrected form in the mail early next month, and are being asked to delay filing their taxes until then. 

But about 50,000 had already filed their taxes, and it had been unclear whether they would be forced to do so again.

Treasury said people who did not pay enough in taxes because of the glitch will be allowed to keep the money. If they paid too much, then they have the option of filing an amended return to get their money back.

The administration has not provided a breakdown of how many people paid too little and how many paid too much.

"The IRS will not pursue the collection of any additional taxes from these individuals based on updated information in the corrected forms," a Treasury spokesman said.

"Individuals may want to consult with their tax preparers to determine if they would benefit from filing amended returns," the spokesman added.

The tax error was a setback for the Obama administration, and Republicans seized on the mistake to argue that the law is a burden on the public.

Senate Finance Committee Chairman Orrin HatchOrrin HatchThe holy grail of tax policy GOP lawmakers ask IRS to explain M wasted on unusable email system GOP senators avoid Trump questions on rigged election MORE (R-Utah) wrote to the administration on Monday asking for answers about how the error happened and why it wasn't revealed until after the ObamaCare sign-up period had ended.