The tax man cometh…
Tax season approaches and the Obamacare bill is finally coming due.
Sarah Ferris of The Hill has some bad news for people who have been receiving Obamacare subsidies:
H&R Block: Majority of ObamaCare customers paying back subsidy
A majority of ObamaCare customers, 52 percent, are being forced to pay back some of their subsidies during this year’s tax season, according to new data from H&R Block.
Customers are paying back an average of $530, which has caused a 17 percent drop in the average return so far this spring, according to the analysis by the tax services giant.
The Obama administration had warned that people could end up paying back some of their subsidies because many were relying on previous years’ income when applying for the tax breaks.
H&R Block has predicted that “most filers” would owe some of their subsidies back to the federal government because they were relying on 2012 income.
The new data, which was released Tuesday, only represents about six weeks of tax filings. Still, it could pose a significant challenge for the administration as it faces an already tough tax season.
Remember when Obamacare supporters insisted it wasn’t a tax? Good times.
Remember when Obama repeatedly claimed Obamacare would save families $2,500 per year?
Ryan Ellis of Americans for Tax Reform has more:
Surprise: Poorest Obamacare Enrollees Face $530 IRS Tax Bill
The majority (52 percent) of Obamacare enrollees receiving an advance premium tax credit to purchase Obamacare insurance is facing the prospect of paying back $530 of that tax credit to the IRS, according to a new study from H&R Block. This clawback is reducing the refunds for these taxpayers by 17 percent this filing season.
Under Obamacare, taxpayers earning between 133 and 400 percent of the federal poverty level are eligible to receive a tax credit to help purchase insurance on Obamacare exchanges. This tax credit is calculated using old tax data of the recipients. The credit is advanced ahead of time to the taxpayer’s insurance company. The taxpayer must reconcile at tax time the advance credit received with the actual credit she is eligible for.
Families of four earning less than $97,000 are eligible for a credit. So is a single mother with two children earning less than $80,000 and an unmarried/childless taxpayer earning less than about $12,000. By definition, these are the lowest income recipients of Obamacare health insurance outside the Medicaid-eligible population. Higher income taxpayers received no tax subsidy and aren’t facing this tax season surprise.
According to the study, a majority of credit recipients–52 percent–have had to pay back the IRS an average of $530, reducing their refunds by an average of 17 percent.
At least you can keep your doctor.
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