Obamacare Credits Could Trigger Surprise Tax Bills
WASHINGTON (AP) — Millions of people who accept government subsidies to help buy health insurance next year could get stung by surprise tax bills later on. That’s if they don’t accurately project their income.
Starting next year, President Barack Obama’s health care law will offer subsidies to help people buy private health insurance. The subsidies are based on income. The lower your income, the bigger your subsidy.
Unless you tell the government otherwise, it will rely on your 2012 tax return for an income estimate. But what if you get a raise or a higher paying job? You could get a bigger subsidy than you qualify for. If that happens, you must repay at least part of the money when you file your 2014 tax return.