Many people who received tax credits to pay for their Obamacare coverage won't get income tax refunds or will see much smaller refunds than expected, USA Today reports
Worse still, noted George Brandes, vice president for healthcare programs at Jackson Hewitt Tax Service, "more than a third of tax credit recipients will owe some money back, and [that] can lead to some pretty hefty repayment liabilities."
Those whose incomes exceed what they put down when they applied for the federal program may also be surprised that they do not qualify for as much of a tax credit as they originally thought, USA Today noted.
For that reason, the tax preparation firm H&R Block advises people who receive tax credits to contact HealthCare.gov and advise of any income changes to avoid sticker shock at tax time next spring.
While their premiums may increase, that may well be preferable for those who count on their tax refunds each year.
"As time goes on, the ability to make adjustments diminishes," Mark Ciaramitaro, H&R Block's vice president of healthcare services, told USA Today. "Clients count on that refund as their biggest financial transaction of the year. When that refund goes down, it really has reverberations."
Consumers are also warned that participation in the healthcare insurance program may make filling out tax forms more complicated, Politco noted
. Those who chose not to participate and who do not have insurance may also be penalized as the IRS gears up with calculations for the first year of Obamacare.
In July, the administration offered up drafts of forms that individuals and businesses would need to fill out come tax time in April — paperwork tax executive Ciaramitaro described as "daunting."
"Overall, we expect the complexity level is just going to go up for a significant group of moderate- to low-income people, whether they got insurance through the marketplace or they didn’t."
Already, the government is struggling to get the new tax forms out to consumers by the expected deadline of Jan. 31, The Washington Times reported
The 1095A form outlines their Obamacare coverage and tax credits, but already experts see it as a looming challenge.
"It really strains credulity to think 1095A is not going to be a big problem," Jackson Hewitt's Brandes told the Times.
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