A significant benefit of the Affordable Care Act is the opportunity to receive money-saving tax credits up front to cut the overall cost of health insurance, but now hundreds of thousands of consumers could owe back some of that money next April.
Those affected took advance payments of the premium tax credit for health insurance. Some married couples could owe $600 or $1,500 or $2,500 or even more. It might feel like a raw deal for some who are already suffocating under the escalating costs of health insurance.
"Health insurance is confusing enough, and now they’re adding the complexities of the Tax Code," said Lorena Bencsik, a member of the Michigan Association of CPAs and owner of Prime Numbers in Ferndale.
When you file that 2014 tax return next year, the Internal Revenue Service will compare your actual income for the year with the amount you estimated when applying for exchange-based health insurance under the health insurance law.
The next open enrollment period begins Nov. 15. But notices were sent this week to some consumers whose incomes don’t match up to such things as 2012 tax return information.
On Monday, the Centers for Medicare and Medicaid Services said at least 279,000 households reported incomes that still don’t match what the government has on record. Supporting documents are needed by Sept. 30.
What can you do to avoid tax-time problems?
Experts say people need to realize early on that they should report changes in income and other changes in one’s life, such as a marriage, throughout the year. See HealthCare.gov to report "income and life changes."
Of course, many people may have no idea that they’d need to report changes.