MANY Americans who didn’t have health coverage last year saw an average penalty more than twice as high as that in 2014, according to a report from tax services company H&R Block.
On average, H&R customers owe a penalty of $383, up from $172 for 2014. Furthermore, 60 percent of taxpayers who had subsidized healthcare are having to pay back some of their financial assistance. This year the average payment is $579, up from $530 in the previous tax season.
The findings indicate that most taxpayers remain confused about how the Affordable Care Act, which requires Americans to purchase health insurance or pay a fine, affects tax credits and refunds.
“There is still a steep learning curve,” Mark Ciaramitaro, H&R Block’s vice president for taxes and health care, told the Associated Press (AP).
To help consumers gain coverage, the law provided tax credits for individuals who opted for insurance through state or federal exchanges.
The problem, however, is that a number of Americans appear to have trouble estimating their expected annual incomes, Ciaramitaro told the AP. Those who underestimated their incomes had to repay part of the credit. Consumers who owed money saw, on average, a 17 percent decrease in their federal refunds, according to H&R Block.
On the other hand, more than one in three taxpayers overestimated their incomes, and thus received an additional average of $450 in their refunds.
Only 3 percent of H&R Block customers with health law subsidies correctly estimated their incomes and didn’t see a change in their tax returns.
The minimum fine an uninsured adult will be subject to in 2016 is $695, up from $325 in 2015 and $95 in 2014.
