Majority must refund a portion of their ACA premium tax credit

H&R Block
February 24, 2015
H&R Block: Taxpayers Following ACA Rules, Refunds Take a Hit

So far in the 2015 tax season, H&R Block (NYSE: HRB), the world's
largest consumer tax services provider, is seeing a majority (52
percent) who enrolled in insurance via the state or federal Marketplaces
paying back a portion of the Advance Premium Tax Credit (APTC). The
average amount paid back is $530, decreasing the tax refund on average
by 17 percent, according to analysis almost six weeks into the 2015 tax
season.

The average tax penalty for not having insurance was $172, an indication
that most taxpayers are paying more than the flat-fee of $95 per
uncovered adult penalty many consumers anticipated.

"The level of payback of the Advance Premium Tax Credit is significant
in that it's costing taxpayers a large percentage of their refund – a
refund many of them count on to pay household expenses," said Mark
Ciaramitaro, vice president of H&R Block health care and tax services.

For next tax filing season, it is important to note that the base
penalty will increase to the greater of $325 or 2 percent of household
income for 2015.

http://newsroom.hrblock.com/hr-block-taxpayers-following-aca-rules-refunds-take-hit/

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Comment by Don McCanne

So far, 52 percent of those receiving a tax credit last year to help pay
their premiums for the ACA exchange plans are having to pay back an
average of $530 - certainly an unpleasant surprise for individuals
subsisting on modest budgets.

Fortunately, for most individuals that repayment will be through a
reduction in their tax refunds rather than an additional payment to be
made from funds on hand. Nevertheless, many people look forward to
receiving their tax refunds in order to be able to meet other important
expenses.

Under a single payer system, there is no premium to be paid and thus no
need for subsidies based on income. It is much simpler and even more
equitable to fund the entire system through progressive taxes.