Some great things about the Affordable Care Act (aka Obamacare): people can still get insurance when they leave a job or are laid off; children up to age 26 can get coverage under a parent’s plan; and pre-existing conditions can no longer be used to deny coverage to Americans.
Good changes all. But lots of components of the ACA are being run through the income tax code, and that is going to make some filers nuts this year.
As The New York Times reports, many people are going to find out when they do their tax returns that they owe a penalty for failing to get health insurance.
I can summarize how the ACA will affect taxpayers in five easy sentences:
- Some taxpayers who received subsidies for health insurance are going to owe money because they have to repay part of a subsidy
- Some taxpayers who received subsidies are going to get more money back, because they were entitled to a larger subsidy.
- Some taxpayers who received no subsidy will now get one, but they’ll have to file a tax return for that to happen.
- Some taxpayers who did not have health insurance will not have to pay a penalty because they’ll qualify for one of the more than 30 exemptions from penalty.
- Some taxpayers will notice virtually no change in how their taxes are prepared.
Hold on to your hats; it’s going to be a bumpy ride this tax season.