For Immediate Release s446

For Immediate Release Contact: Gigi Thompson Jarvis 202.822.6232, x119 [email protected]

ACA Marketplace Complicates Tax Returns May Delay 2015 Tax Season

WASHINGTON, DC (October 30, 2014) No one wants a big surprise at tax time, which is why tax professionals recommend that clients review their tax situation in October and make any necessary adjustments to withholding or estimated tax payments.

“This used to be a simple process,” said Mary Olson, enrolled agent and manager of The Iola Tax Place in Iola, WI. “This year many tax professionals need to devote more time to understanding the impact of the new Affordable Care Act on their clients. Taxpayers who obtained health insurance through the Affordable Care Act Marketplace may be in for a big surprise at tax time.”

As part of the Marketplace, eligible taxpayers had the option of receiving a subsidy to help pay their monthly health insurance premiums. This subsidy was paid directly to the health insurance carrier and was considered an advance of the premium tax credit. Eligibility for the subsidy was based on estimated household size and income.

Generally, individuals and families with estimated household incomes for the year between 100 percent and 400 percent of the federal poverty level for their family size were eligible for the subsidy.

One person: household income between $11,490 and $45,960 Family of two: household income between $15,510 and $62,040 Family of four: household income between $23,550 and $94,200

Olson cautioned, “If the actual 2014 household income exceeds these amounts and a subsidy was granted, the subsidy will need to be repaid on their 2014 federal tax return.”

Many people were exempt from the Marketplace, so the subsidy was not allowed. Those exempt were already receiving affordable minimum coverage through an eligible employer plan, were eligible for Medicaid, Medicare, CHIP or TRICARE, or were claimed as a dependent on another person’s tax return.

In August, the IRS issued draft copies of the health insurance marketplace statement and the premium tax credit form, which must be filed along with the tax returns of those wishing to claim the credit. If the final copies of the forms and instructions are not released in sufficient time for the tax software companies to incorporate them into their programs, the start date for the filing of 2014 tax returns could be affected.

Filing a tax return can be daunting and stressful without the advice and guidance of a tax expert. Enrolled agents receive their licenses from the Department of Treasury – they’re America’s Tax Experts®. To find an enrolled agent in your area, call 1.800.424.4339 or visit the NAEA website at www.naea.org and click on “Find an EA.”