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"Some Folks Were Overpaid..." Over 3 Million Obamacare Subsidy Recipients Will Owe IRS

Tyler Durden's picture




 

While the Affordable Care Act fines those who don't have health insurance, it also provides subsidies for people making up to four times the federal poverty line ($46,680)... but, as The Washington Examiner reports, the subsidies are based on past tax returns, so many people may be receiving too much. In fact, as H&R Block calculates, as many as 3.4 million people who received Obamacare subsidies may owe money to the federal government.

 

As The Washington Examiner reports,

As many as 3.4 million people who received Obamacare subsidies may owe refunds to the federal government, according to an estimate by a tax preparation firm.

 

H&R Block is estimating that as many as half of the 6.8 million people who received insurance premium subsidies under the Affordable Care Act benefited from subsidies that were too large, the Wall Street Journal reported Thursday.

 

“The ACA is going to result in more confusion for existing clients, and many taxpayers may well be very disappointed by getting less money and possibly even owing money," the president of a tax preparation and education school told the Journal.

 

While the Affordable Care Act fines those who don't have health insurance, it also provides subsidies for people making up to four times the federal poverty line ($46,680).

 

But the subsidies are based on past tax returns, so many people may be receiving too much, according to Vanderbilt University assistant professor John Graves, who projects the average subsidy is $208 too high, the Journal reports.

 

Tax preparers, who frequently advertise their ability to deliver big refunds, have been working feverishly to avoid customer anger stemming from lower-than-expected refunds due to insurance premiums. They also are trying to make sure customers understand the potential fines for not having insurance.

 

"Eighty-five percent of our customers get a refund," said Kathy Pickering, who directs the H&R Block Tax Institute, according to the Washington Post. "That refund could be offset by the penalty. And if that happens, they're going to be understandably angry."

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Angry indeed...

 

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Sun, 01/04/2015 - 23:44 | 5622420 Porous Horace
Porous Horace's picture

If you like your paycheck garnished, you can keep your paycheck garnished.

Sun, 01/04/2015 - 21:43 | 5622075 MedicalQuack
MedicalQuack's picture

I said this about a year ago...getting more believers now...Obamacare is just one big Attack of the Killer Algorithms...nobody knows WTF...any more...rates, coverage, subsidies, doctors in network..it's all a mess

http://ducknetweb.blogspot.com/2014/03/obamacare-one-big-attack-of-killer.html

Mon, 01/05/2015 - 01:15 | 5622549 uncle_vito
uncle_vito's picture

Refund?   You mean they have to pay higher estimated taxes in 2015.

Mon, 01/05/2015 - 06:33 | 5622873 SMC
SMC's picture

Obummercare has less support than prohibition and will suffer the same fate.  If it is not repealed soon, hatred of the program may turn out to be one of the pillars of the 2nd American Revolution.

 

Mon, 01/05/2015 - 08:25 | 5622997 F em all but 6
F em all but 6's picture

We had to squeeze some folks

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