Half of ObamaCare subsidy recipients will owe on their taxes
Half of all households that received ObamaCare tax credits last year will likely owe money to the federal government, a new study found.
Nearly all families that received tax credits will either owe money or receive extra money because their tax filings had changed after they calculated their ObamaCare subsidies, according to a new report by the Kaiser Family Foundation.
Only 4 percent of households received the correct subsidy, according to the report, which uses data from the national Survey of Income and Program Participation.
Of those who will have to repay, the average amount owed is $794, the study found. Out of the 45 percent of people receiving money back, the average refund is $773.
Any owed or refunded dollars related to ObamaCare are just one piece of a person’s overall tax filings.
“The average refund is over $2,900, which would offset any repayment in most cases,” a Treasury spokesperson said. “That is why Treasury estimates that the vast majority of marketplace consumers who benefitted from tax credits will still receive a tax refund.”
Some households will be paying back the majority of their tax credit. Middle-income households — with income from 300 to 400 percent of the poverty level — will repay about 65 percent of their tax credit.
Between 4.5 million and 7.5 million households received tax credits in 2014. This year’s tax season marks the first time that people will have to account for their ObamaCare subsidies or pay penalties for lacking coverage.
In ObamaCare’s first year, people buying insurance received subsidies in advance based on their tax returns from 2012, which was the most recent year available.
People with the middle-level incomes were more likely to owe money — and to owe more.
There are some limits for how much money an individual or family would have to repay if their tax credits were too large. For example, families making less than 300 percent of the poverty level will not pay back more than $1,500. Anyone with an income greater than 400 percent of the poverty level has no cap on repayment.