106.7 The Fan All News 99.1 WNEW CBS Sports Radio 1580

Millions Could Get Surprise Tax Bills Under ‘Obamacare’ If They Don’t Accurately Project Their Income

View Comments
President Barack Obama speaks on the Brain Research through Advancing Innovative Neurotechnologies (BRAIN) Initiative on April 2, 2013 in the East Room of the White House in Washington, D.C. (credit: MANDEL NGAN/AFP/Getty Images)

President Barack Obama speaks on the Brain Research through Advancing Innovative Neurotechnologies (BRAIN) Initiative on April 2, 2013 in the East Room of the White House in Washington, D.C. (credit: MANDEL NGAN/AFP/Getty Images)

CBS DC (con't)

Affordable Care Act Updates: CBSDC.com/ACA

Health News & Information: CBSDC.com/Health

Latest News

Get Breaking News First

Receive News, Politics, and Entertainment Headlines Each Morning.
Sign Up

WASHINGTON (AP) — Millions of people who take advantage of government subsidies to help buy health insurance next year could get stung by surprise tax bills if they don’t accurately project their income.

President Barack Obama’s new health care law will offer subsidies to help people buy private health insurance on state-based exchanges, if they don’t already get coverage through their employers. The subsidies are based on income. The lower your income, the bigger the subsidy.

But the government doesn’t know how much money you’re going to make next year. And when you apply for the subsidy, this fall, it won’t even know how much you’re making this year. So, unless you tell the government otherwise, it will rely on the best information it has: your 2012 tax return, filed this spring.

What happens if you or your spouse gets a raise and your family income goes up in 2014? You could end up with a bigger subsidy than you are entitled to. If that happens, the law says you have to pay back at least part of the money when you file your tax return in the spring of 2015.

That could result in smaller tax refunds or surprise tax bills for millions of middle-income families.

Related: Financial Discipline Grows Five Years After Crisis

“That’s scary,” says Joan Baird of Springfield, Va. “I had no idea, and I work in health care.”

Baird, a health care information management worker, is far from alone. Health care providers, advocates and tax experts say the vast majority of Americans know very little about the new health care law, let alone the kind of detailed information many will need to navigate its system of subsidies and penalties.

“They know it’s out there,” said Mark Cummings, who manages the H&R Block office where Baird was getting her own taxes done. “But in general, they don’t know anything about it.”

View Comments
blog comments powered by Disqus
Follow

Get every new post delivered to your Inbox.

Join 1,610 other followers