Skip to comments.Next Big Obamacare Shock May Come at Tax Time
Posted on 12/28/2013 6:03:32 PM PST by afraidfortherepublic
People who use subsidies to help pay for their Obamacare policies may get a nasty shock at tax time, when the Internal Revenue Service could hit them with a big demand to repay the money.
While it's in the law, it's still likely to make plenty of Obamacare subscribers angry at the IRS.
"If I were the IRS, I would be very concerned that Im going to be viewed as the villain when people have to pay back money the government gave them for health insurance, says Chris Condeluci, who served as Senate Finance Committee GOP tax counsel when Obamacare was being drafted.
According to the tax code, insurance buyers must be sure to alert insurance exchanges to life changes that affect their incomes through the year, reports Politico.
A new job, promotion, or anything that causes income to go up could result in a demand to return the tax credits, if the life change isn't reported, according to the new rules.
Recipients who lose income could get a tax refund when next year's taxes are calculated in 2015, but more likely, they'll get a bill. For example, in California, 38 percent of people who get tax credits to pay for their healthcare are expected to get bills totalling more than $850 each if they don't report income changes.
Many people, instead of having to cough up the money for the bill, instead will see smaller income tax returns, said University of California Berkeley professor Ken Jacobs, who co-wrote a study on the issue for healthaffairs.org.
Taxpayers can choose to pay the full price for their Obamacare policies and then collect refunds for the tax credits they passed up when tax time rolls around. However, many people choose to take the tax credits when picking insurance plans to help absorb...
(Excerpt) Read more at newsmax.com ...
It will be forgiven with the wave of a hand. So let it be written. So let it be so.
hm Arpil 15th....tax deadline ...November 4th? Election day....
great timing indeed. People will be HIGHLY suspicious of the party that brought them Obamascare
Ain’t communism just grand? LOL!
If you like your money, you can keep your money. PERIOD!
” the sheeple voted for the Dork in Chief without regard for the dire clarion warnings”
Let them eat cake.
The timing is about 2 months greater than the average American’s attention / grudge-holding span. Kind of fortuitous for the pols robbing Peter in order to re-distribute to Paul eh?
On another note, will the people receiving insurance subsidies have to pay income tax on the subsidies? Are the subsidies considered taxable income?
Even worse will be the insult added to injury when they realize the O-Care Web-insult site purposefully miscalculated their subsidy to entrap them into signing up for the nearly free insurance. Can hear the “so sad, so sorry, but pay up sucker”.
We sometimes do Prevailing Wage jobs that, for a couple of months of the higher wages, would put a guy over the annual income cap at tax time.
Next year, he may be at the lower level again. A string of bad weather could mean he would earn even less than he did last year.
While I get paid the same hourly rate, my annual income can vary by $10-15,000 from year to year.
maximum fubar ...let’r rip!!! let the chips fall where they may!!
On another note, will the people receiving insurance subsidies have to pay income tax on the subsidies? Are the subsidies considered taxable income
I’m sure the regulations dealing with this issue are written in bureaucratic double talk, and will at least initially be interpreted in different ways by different IRS offices and even different examiners.
Fortuitous indeed.... Unfortunately, for the rest of the Nation!
Sadly, the republican party isn't any better.
When people lose their insurance and find they do not qualify for a subsidy, make too much for Medicaid and cannot begin to afford the cheapest Obamacare plan and are left with no health insurance and then get taxed (a.k.a fined)there will be pandemonium.
Unless you’re at 400% of the federal official poverty level, no obligation to repay federal health care subsidies is incurred.
You still get to keep your Obamacare subsidies if you were eligible for the silver plan.