Sat | Jan 19, 2019

Tax refunds for many take hit or get bump from health law

Published:Tuesday | April 7, 2015 | 12:00 AMWASHINGTON, (AP):
President Barack Obama, right, stands on the tarmac with Majajor General Edward Tonini, second from right, Colonel Barry Gorter, third from right, and Jerry Abramson, left, as the president arrives on Air Force One at Louisville International Airport, in Louisville, Kentucky.
President Barack Obama tours Indatus with Indatus president Philip Hawkins, left, in Louisville, Kentucky. Obama said that the US can't afford tax cuts for the rich while cutting job training programs for young people.

The law offers tax credits so people without access to job-based health insurance can buy private coverage. Because these subsidies are tied to income, consumers must accurately estimate what they will make for the coming year.

That's been a challenge for millions of people.

Guess on the low side, get more help now with premiums, but owe money later at filing time. Overestimate income, expect bucks back from the taxman.

Many consumers may not have understood that is how it works when they signed up. Some experts caution that such complications could discourage uninsured people from getting covered.

Rob Tuck of Dublin, California, said he had anticipated a refund of about $400 on his 2014 taxes. But that almost has been wiped out because he had to repay some of the subsidy. He changed jobs during the year, and his income went up a little.

Tuck, who works for a San Francisco area tech-support company, said he enrolled to avoid tax penalties for being uninsured, but feels penalised anyway now.

"I was expecting to get dinged a little bit, but I was actually kind of surprised when it came down that much," he said.

Kelsey Park started out 2014 in Dallas, earning good commissions by selling wedding gowns. She left for graduate school at the University of Alabama in Tuscaloosa, and signed up for coverage through the law. She ended up overestimating her income because she didn't get another job as anticipated.

Park's tax refund came to $2,500, partly because she had too much income tax withheld and partly because she received a smaller health care subsidy than she was entitled to.