Tax time brings sobering surprise as health care act’s penalties kick in
JANUARY 10, 2015, 11:58 PM LAST UPDATED: SUNDAY, JANUARY 11, 2015, 12:03 AM
BY LINDY WASHBURN
STAFF WRITER |
THE RECORD
First the carrot, now the stick.
Insurance information needed for taxes
For every member of the household included on a tax return, ask:
Did you have health coverage for all of 2014? If not, was there a gap of more than three months?
Did you get insurance through the federal marketplace for New Jersey, HealthCare.gov? If yes, watch for an IRS Form 1095-A, which should arrive in the mail by the end of January. It provides information about your estimated income and subsidies, which you will need to reconcile with your actual income to determine whether your subsidies were too low or too high. Those who received subsidies will need to file a Premium Tax Credit form (8962), new this year.
If you did not have insurance, or had a gap in coverage longer than three months, consider whether to apply for a hardship exemption. More information, along with detailed instructions for applying for such an exemption, is available at HealthCare.gov.
Important dates
Feb. 15 is the last day to apply on the federal marketplace for New Jersey, HealthCare.gov, for coverage that starts on March 1.
April 15 is the deadline for filing federal income taxes.
The Affordable Care Act rolled out last year with the promise of health coverage for those who hadn’t been able to get it before. That was the good part. Now comes the penalty phase: Those who didn’t have health coverage in 2014 will probably owe the Internal Revenue Service money this year.
As tax-filing season opens, Americans are beginning to realize that President Obama’s signature health-reform law was as much about taxes as health insurance. Experts estimate that as many as 30 million Americans — 10 percent of the population – will be affected by the changes it made in the tax code this year.
How that shakes out – how many will pay penalties or be exempted from them, how many will see their tax refunds increased or decreased by the filing day of April 15 — remains to be seen. But as ignorance and confusion give way to surprise at the law’s impact on consumers’ pocketbooks, the political repercussions could be significant.
“I’m afraid this is going to be the third strike,” said Linda Schwimmer, vice president of the New Jersey Health Care Quality Institute. First was the discovery, in the fall of 2013, that those who liked their current insurance coverage wouldn’t necessarily be able to keep it – despite President Obama’s promise to the contrary. Next was the debacle, during the first open-enrollment period, of HealthCare.gov’s computer problems. Now comes the collision of the health law and income taxes.
Wait. What ?
that can’t be right… Obamacare is free.