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Obama Administration Seek to Quell ACA Tax Concerns

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Federal officials are downplaying Affordable Care Act-related changes to tax filing this year. The changes include a new requirement to report one's health insurance status.

Federal officials are seeking to calm anxiety about the tax implications of the Affordable Care Act ahead of the 2015 tax filing season.

This marks the first year Americans are required to prove they have health insurance or pay a penalty. The penalty is being applied to income tax returns, a fact that for some has compounded the stress already associated with tax filing.

A survey released last month found nearly half of Americans weren’t even aware that they would have to report their health insurance status when filing their 2014 returns.

In response to concerns about the mandate, Obama Administration officials this week released a statement downplaying the impact of the change.

“For the vast majority of Americans, tax filing under the Affordable Care Act will be as simple as checking a box to show they had health coverage all year,” said Jacob J. Lew, the US Treasury Secretary. “A fraction of taxpayers will take different steps, like claiming an exemption if they could not afford insurance or ensuring they received the correct amount of financial insurance.”

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The press release did not explicitly describe the “different steps” those taxpayers would have to take, though the agencies said they’re committed to providing information to tax filers, through online tools and local tax preparation professionals.

Lew noted that a “small fraction,” of taxpayers will be subject to penalties if they are found to have been uninsured despite being able to afford coverage. The penalties in the first year are rather minimal—1% of income over $10,000 or $95 per family member, whichever is higher. The penalties increase in later years.

However, Health and Human Services Secretary Sylvia M. Burwell (pictured, left) noted that many Americans will see tax benefits from the Affordable Care Act benefits, in the form of tax credits to offset their monthly insurance premiums.

“This benefit, which in many cases helped make the cost of healthcare less than the cost of a cell phone or cable bill, enabled these consumers to enjoy the benefits of coverage throughout the year,” she said.


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