The national conference of CPA practitioners is warning that the Affordable Care Act, also known as Obamacare, may have a negative impact upon millions of taxpayers this winter.
The biggest problem is that many taxpayers are completely unaware that their refund may be reduced or even eliminated due to various issues brought about because of the Affordable Care Act.
This will primarily affect the over 80 million taxpayers who purchased healthcare insurance on the exchange. Many of those people received an advanced premium tax credit which subsidized their premiums, however changes in their life could make them ineligible for the credit; for example a new job, getting married or divorced, getting a raise, all of these have the potential to eliminate the credit. Stephen Mankowski who is the chairman of the NCCPAP’s tax policy committee stated “essentially these life changes could cause the taxpayer to lose the subsidy, resulting in an increase in the taxes and the loss of the refund.”
If you’re a taxpayer who received a credit and you have had substantial life changes then you will need to reconcile those two issues. The problem is this is complicated and taxpayers will receive forms they are not familiar with.
The confusion and the problems stemming from it very likely and so much so that the NCCPAP is recommending that the government delay implementing this part of the Affordable Care Act for 1 year to give tax preparers time to help the client understand these issues.