Tags: obamacare | tax return | poor | Medicaid

Weekly Standard: Tax Rule Creates Obamacare Confusion for Poor

By    |   Friday, 03 Apr 2015 02:21 PM

People who don't make enough money to file an income tax return still need to file a tax return to show that they got Obamacare coverage last year, and if they don't, they could face a tax for not having coverage.

Failure to have insurance shows as an additional tax, writes tax attorney Kimberly Pinter for The Weekly Standard's blog, but many people who don't make enough money can get an income-based exemption from getting coverage.

But according to the HealthCare.gov website, people can get an income-based exemption if "you don't have to file a tax return because your income is below the level that requires you to file."

The problem is, Pinter said, there is no way to file the exemption without claiming it on the tax return "that's right, the tax return you're not required to file."

And when the tax return isn't filed, the exemption isn't filed, meaning the nation's poorest can be assessed a tax penalty for the coverage they aren't required to have.

The effects are very regressive, Pinter said, noting that, according to Scott Hodge of the Tax Foundation, an estimated 11 million individuals and households did not file tax returns in 2010 because they did not make enough money to meet the IRS-filing threshold.

Many who do not meet the income requirements still do file, though, and obtain refunds through programs such as the earned income tax credit. Further, some people who are below the filing threshold do have insurance coverage through a government program such as Medicaid.

But there are many uninsured who do not file taxes, because they don't believe they need to, and will not understand they need to file the returns to claim their exemption.

"Those who do realize it in time are less likely to be equipped to file their taxes on their own, and are also not likely to be aware of or have access to free-file programs, whether through the Internet or community resources, such as VITA," Pinter wrote. "This situation forces those who can least afford it into the offices of tax preparers like H&R Block, burdening them with an added expense they can ill afford."

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People who don't make enough money to file an income tax return still need to file a tax return to show that they got Obamacare coverage last year, and if they don't, they could face a tax for not having coverage.
obamacare, tax return, poor, Medicaid
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2015-21-03
Friday, 03 Apr 2015 02:21 PM
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