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.
Yet every new “shock” is easily absorbed by our absentee citizens thereby diffusing the term “shock”, translation next big “non-event”.
“If I were the IRS, I would be very concerned that Im going to be viewed as the villain...”
Yeah, right. That’ll stop ‘em.
Given all the irregularities of his eligibility-claims, and the Republican party's lackluster pursuit thereof, it looks like they're complicit.
Given the 'investigation' of Fast & Furious —a clear case of State Sponsored Terrorism and probably one of the easiest Treason cases— yielding jack-shit, it looks like they're complicit.
Given the "roll over and play dead" they do allowing arbitrary changes of the ObamaCare law, it looks like they're complicit.
Given how they nominated Obama's political clone in 2012, it looks like they're complicit.
Given how they passed the NDAA which allows indefinite detention (essentially suspending Habeus Corpus), it looks like they're complicit.
Far closer than we may think:
‘Unintended Consequences’ is a novel by John Ross.
Search it, very close to NOW.
It is rather ironic that obamacare is HAMMERING vast swaths of obama kool-aid drinkers.
I guess they should have read THAT bill before they passed it.
"If you like your money, I will take your money and give it to someone who will like it better."
I liked my health plan and Obama took it.
> 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.
Of course, 47% of the US population don’t pay income taxes, and of those, 100% will receive health care credits that will be non-taxable, so they will be able to keep the Snap card, Zer0 phone, and keep sending the kids to Emergency care for every sniffle or knife wound.
Hey, who cares, half of the population jus don’t give a sh!t!
Unless you are a productive member of society, in such case we will take your money for the good of society!
I don't think that is accurate. Subsidies and deductibles are on sliding scale between 139% and 400% fpl. Lets say a person starts out the open enrollment period at 200% fpl. Then for whatever reason that person ends up the year at 375% fpl. They will have to return some of those subsidizes. People on the exchanges are suppose to report qualifying events, but how does one factor something like overtime in?
Soon to be classified as "luxuries" and taxed at an even higher rate...
Interesting, who in the IRS ever thinks that they’re NOT already viewed as the villian?