Used the Wrong PCORI Rate? How to Fix It
A wrong PCORI rate is fixed on Form 720-X, the amended quarterly excise tax return. You don't send a second Form 720, and you don't adjust next year's fee. IRS Q&A 16 describes this exact mistake, a return that "determined a fee using an incorrect applicable dollar amount," and says the same form also covers adjustments that result in an overpayment. The applicable dollar amount is simply the per-life rate.
So the direction of the error changes what you do at the end of the form, but not which form you use. Here is how to confirm the error and work through both cases.
Which rate was right?
The rate depends on the day the plan or policy year ended. The day you filed doesn't matter. On the June 2026 Form 720, the two most recent rates sit on separate lines:
| Plan or policy year ended | Rate | Insurer line | Self-insured line |
|---|---|---|---|
| Oct 1, 2024 to Sep 30, 2025 | $3.47 | 133(a) | 133(c) |
| Oct 1, 2025 to Sep 30, 2026 | $3.84 | 133(b) | 133(d) |
Two situations are easy to get wrong:
- Fiscal plan years. A plan year that ended September 30, 2025 takes $3.47. One that ended October 31, 2025 takes $3.84, even though both land on the same return.
- Two rates on one return. The return due July 31, 2026 covers every year that ended in 2025. A sponsor with one plan ending June 30 and another ending December 31 needs both rates on that single return.
To recheck your number, multiply your average covered lives by the correct rate, or run it through the PCORI fee calculator. Older rates are in IRS Q&A 3 if your error is from an earlier year.
Underpaid: you used $3.47 when $3.84 applied
Take a made-up employer with a self-insured plan. The plan year ended December 31, 2025, with an average of 210 covered lives. The return for the quarter ending June 30, 2026 showed the old rate.
| Form 720-X line 1 column | Entry |
|---|---|
| (a) Quarter ending | June 30, 2026 |
| (b) IRS No. | 133 |
| (d) Tax as originally reported | $728.70 (210 x $3.47) |
| (e) Adjusted tax | $806.40 (210 x $3.84) |
| (f) Change, column (e) minus column (d) | $77.70 |
The total on line 4 is a balance due of $77.70. The form says to pay it with the return: enclose a check or money order payable to "United States Treasury," and write "Form 720-X," your name, address, EIN, and the date you signed the form on it. Then complete line 6, the explanation. You skip line 5, which is only for overpayments.
Don't let this one sit. Pub. 510 lists paying taxes late among the acts that can bring penalties and interest. If you later get a penalty notice, the Form 720 instructions say to reply to the notice with an explanation so the IRS can decide whether you meet reasonable-cause criteria. Our post on PCORI late-filing penalties covers those charges in more detail.
Overpaid: you used $3.84 when $3.47 applied
Now a made-up employer whose self-insured plan year ended June 30, 2025, with an average of 340 covered lives. That end date takes $3.47, but the return used the newer rate.
| Form 720-X line 1 column | Entry |
|---|---|
| (a) Quarter ending | June 30, 2026 |
| (b) IRS No. | 133 |
| (d) Tax as originally reported | $1,305.60 (340 x $3.84) |
| (e) Adjusted tax | $1,179.80 (340 x $3.47) |
| (f) Change, column (e) minus column (d) | ($125.80) |
Line 4 shows an overpayment of $125.80, so you complete lines 5 and 6. Line 5 asks whether you want the amount refunded (5a) or applied to your next Form 720 (5b, with that return's quarter-ending date).
A practical point on 5b: if PCORI is your only excise tax, you file Form 720 once a year, so your "next Form 720" may be many months away. Line 3, the statement required for many tax decreases, isn't written for this fee, because line 3b lists IRS No. 133 as an exception.
What should line 6 say?
Line 6 is where the IRS reads why the number changed. Give it the facts someone needs to redo your math. A made-up example for the first case above:
The form points to its instructions for the line 6 requirements. If you need more room, attach sheets showing your name and EIN. Check these before you mail it:
- Column (d) is what you actually reported for IRS No. 133, or the last adjusted figure if you have amended it before.
- Column (e) is the full corrected tax. It isn't the difference.
- If you are fixing more than one quarter, each adjustment gets its own row with its own quarter ending.
Can you fix this online?
Only partly, because the IRS decides what can be e-filed. Its excise e-file program covers Forms 720, 2290, and 8849. Form 720-X is a paper return that you print, sign, and mail. Pub. 510 adds that you can file it by itself, or attach it to Form 720 if it shows a decrease in tax. Our Form 720-X guide covers the time limits and where the mailing address is published.
EasyFile720 can do the preparation. You enter each correction as a row, and the change and the line 4 total are computed for you. You then download a completed Form 720-X PDF to print, sign, and mail. It works even if you filed the original return somewhere else. Amendments carry their own one-time service fee, shown before you pay.
Your next step depends on the return in front of you. For the correction, prepare Form 720-X and mail it. For your next annual fee, file your PCORI fee online: choose the line that matches your plan year end, and the rate and math are filled in for you. Creating an account is free with no credit card, and a filing is $39.95 when you submit. Start from the PCORI fee filing page.
FAQ
Can I correct the wrong rate by filing a second Form 720 for the same quarter?▼
No. The IRS says only one Form 720 should be filed for each quarter, and the instructions say not to enter prior-quarter adjustments on Form 720. Use Form 720-X.
Do I check a box on Form 720-X line 3 for a PCORI overpayment?▼
Line 3a is limited to IRS Nos. 22, 26, 27, and 28, and line 3b lists IRS No. 133 among its exceptions. So neither statement is written for the PCORI fee.
How long do I have to fix the rate?▼
IRS Q&A 16 says Form 720-X may be filed anytime within the applicable limitation period. If the fix lowers your fee, check the time limit before you wait on it.
What if the rate was right but my covered lives number was wrong?▼
The correction goes on the same form. Q&A 16 covers corrections to a previously filed Form 720 in general, with the wrong rate given as an example. Enter the fully corrected fee in column (e) and explain the change on line 6.
File your PCORI fee online
Create a free account with no credit card and build your return. You pay $39.95 only when you file. EasyFile720 is an IRS-authorized e-file provider, and you get an acknowledgment when the IRS accepts your return.
Sources: IRS PCORI Questions and Answers (Q3, Q15, Q16); Form 720-X (Rev. June 2026); Form 720 and Instructions for Form 720 (Rev. June 2026); Pub. 510 (Rev. December 2025); IRS Excise Tax e-File page. General information, not tax advice. Confirm how the rules apply to you with a qualified advisor or the IRS.
