Many people who received tax credits to pay for their Obamacare coverage won’t get income tax refunds or will see much smaller refunds than expected, USA Today reports.
Worse still, noted George Brandes, vice president for healthcare programs at Jackson Hewitt Tax Service, “more than a third of tax credit recipients will owe some money back, and [that] can lead to some pretty hefty repayment liabilities.”
Those whose incomes exceed what they put down when they applied for the federal program may also be surprised that they do not qualify for as much of a tax credit as they originally thought, USA Today noted.
For that reason, the tax preparation firm H&R Block advises people who receive tax credits to contact HealthCare.gov and advise of any income changes to avoid sticker shock at tax time next spring.
While their premiums may increase, that may well be preferable for those who count on their tax refunds each year.
“As time goes on, the ability to make adjustments diminishes,” Mark Ciaramitaro, H&R Block’s vice president of healthcare services, told USA Today. “Clients count on that refund as their biggest financial transaction of the year. When that refund goes down, it really has reverberations.”
Read more here.