FRONT PAGE CONTRIBUTOR
The ObamaCare tax credit trap
Then-House Speaker Nancy Pelosi encouraged us to pass ObamaCare to find out what was in it. Here’s the latest grisly surprise, courtesy of the Associated Press:
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.
Funny, I seem to recall Barack Obama swearing that he’d never raise taxes on the Sainted Middle Class. Just wait until they get their surprise tax bills in 2015! I’m sure everyone will have a good laugh about the whole crazy situation.
Let’s see if I’ve got this straight: when you fill out the 15-page form to apply for the subsidy needed to buy Barack Obama’s ridiculously expensive health insurance, you’ve got to estimate what you’re going to make in the coming year, and hope to God you don’t get a raise, or find a more lucrative job. No, sorry, back up: you’ve got to estimate what you and your spouse will be making. If you get it wrong, or leave the ObamaCare commissars to estimate your subsidy based on last year’s tax returns, you may well end up with a “surprise tax bill” to recover the subsidies you didn’t deserve for the health insurance you can’t really afford.
And you’ll be spending those tax subsidies in “state exchanges” that most likely won’t be ready when you need them, because the data processing infrastructure isn’t there, and the Department of Health and Human Services is still frantically scribbling new regulations.
The 15-page ObamaCare form drafted by the IRS does not warn of the tax credit trap, but fear not, the Administration and its allies will be launching “a multi-million dollar campaign using social media, paid advertising, and grass-roots organizing” to educate us. Great! More millions wasted on this pile of ObamaCare garbage.
And none of the tax-hungry, regulation-happy Big Government geniuses who dreamed up ObamaCare saw this coming. Nobody saw this coming.
“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.”
[…] “It’s potentially going to come as a shock to individuals who meet that criteria where their income hits a point where they owe money back,” said Rep. Charles Boustany, R-La., chairman of the House Ways and Means oversight subcommittee. “The fact is, with variations in income, people could end up owing money back and that will create consternation and problems for them.”
How much money are we talking about? Of course, none of the clowns running the ObamaCare circus can answer that question with authority, but the AP tells us Congress has already raised the repayment caps by a cool $40 billion over the next decade.
$4 billion a year, taken straight from the hides of what used to be known as the “middle class.” Congratulations, America. Bet you can’t wait until the next “surprise” lunges from this fetid swamp of legislative failure and sinks its teeth into your throat.