Of the 8 million+ Americans who purchased 2014 health insurance coverage via Obamacare 85% selected Marketplace plans with financial assistance.
Many of these people may end up owing the feds some money when they fill out their 2014 federal income taxes.
The Affordable Care Act’s tax credits and cost-sharing subsidies which are available to those with incomes 100%-400% of the federal poverty level. The amount of financial assistance a person receives is based on projected income. That means that if your income changes throughout the year, your eligibility for financial assistance may shift.
When you file your 2014 return in 2015, the IRS will compare your actual income for 2014 with the amount you estimated when applying for exchange-based health insurance, according to Kiplinger’s “Beware Pitfalls of the Health Care Subsidy.” At that point, you may owe money for making more than you estimated and thereby receiving too much subsidy, or receive a refund if you earned less than estimated.
If you underestimated your 2014 income and still make less than 400% of the federal poverty level, your repayment amount will likely be capped. If your income rises above 400%, you’ll likely be required to repay any financial assistance in its entirety.
