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Tags: Obamacare | 2015 tax filing

Experts: Expect Tax-Filing Chaos in 2015 Over Obamacare

By    |   Friday, 12 December 2014 02:53 PM

The 2015 tax filing season includes new Obamacare provisions requiring tax filers to prove whether they and their dependents have health insurance, and some tax experts are warning that this could prove to be chaotic – especially for people who have to repay the government for giving them excessively generous subsidies.

Those who lack coverage and do not receive a waiver will face a fine of either $95 or 1 percent of their income, whichever is greater.

And those who purchase insurance through Obamacare using a federal tax credit already provided to them will be required to do additional paperwork to determine if their income in 2014 actually warranted their obtaining such a benefit.

“There’s a lot of potential failure points,” Tax Foundation economist Alan Cole told The New York Post. “The big problem is if it turns out you got too large of a premium tax credit, the government will ask for it back.”

Individuals need to provide the paperwork to prove they have health insurance coverage through their employer or through one of the Obamacare exchanges. If they obtained insurance through Obamacare, the documentation must explain what kind of health plan they purchased and how much they received in subsidies.

And if a taxpayer was granted an exemption from this coverage mandate, he or she needs to provide the IRS with the documentation proving it.

Some experts believe the biggest losers resulting from Obamacare enforcement through the IRS could be those people who make a good-faith effort to comply with the law.

If taxpayers completely ignore the question of coverage (a new line on the standard 1040 form) it is unclear how the IRS might respond, said George Brandes, vice president of healthcare programs at Jackson Hewitt, one of the largest tax preparation companies in the United States.

In an interview with Politico this summer, he expressed concern that those who try to comply with the law will be penalized with delays while those who ignore it are not. “You’re at much greater risk for having things gummed up if you’ve done what you’re supposed to do,” Brandes said. “It’s just sort of a recognition of the reality of how this is going to work.”

Douglas Holtz-Eakin, who headed the Congressional Budget Office from 2003 to 2005, said last week the Affordable Care Act's subsidy payments made for this year are unlikely to have been accurate, meaning that some people will be required to reimburse the government for over-payments, Bloomberg reported. The 2015 tax filing season “is going to be a disaster,” he warned.

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The 2015 tax filing season includes new Obamacare provisions requiring tax filers to prove whether they and their dependents have health insurance, and some tax experts are warning that this could prove to be chaotic.
Obamacare, 2015 tax filing
428
2014-53-12
Friday, 12 December 2014 02:53 PM
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