tic-years
So what happens if the flawed, confusing process results in a tax credit
larger than what the law calls for?
A hypothetical example might help illustrate: a health exchange customer
selects an Obamacare exchange plan. The government estimates that this
taxpayer will earn $30,000 this year, which makes her eligible for a $2000
tax credit. This $2000 is paid to the taxpayer's insurance company to help
with premiums.
The next spring, our customer/taxpayer is filling out her tax return.
Unfortunately, the government estimated the taxpayer earned too little and
paid too large a credit. She actually earned $40,000, and so only had a
$1500 credit coming to her.
Depending on the taxpayer's income level and availability of verified
affordable workplace insurance, she will have to pay back much or all of the
$500 overage to the IRS. This means skinnier refunds and maybe even
liabilities, and it won't be the taxpayer's fault-it will be the
government's fault.
It is also inevitable that many people are receiving tax credits for which
they are completely ineligible. The firewall of the offer of employer
sponsored insurance is a new concept - tax preparers will have difficulty
figuring out how it works in operation. There is virtually no way to catch
it on the front end - but come tax filing season, many people will end up
owing thousands of dollars, and it will be a complete surprise."
By Epictetus
No comments:
Post a Comment