H&R Block reports that half of Obamacare enrollees owe the IRS money after receiving too many subsidies.
A release put out by the consumer tax preparation company says that 53 percent of those signed up for insurance through Obamacare received too much subsidy support during the year. As a result, Obamacare consumers owe the IRS an average of $530, which is deducted from any refund to which they were entitled. With an average refund of $3,100, the net impact was to cut tax refunds for Obamacare enrollees by 17 percent.
A smaller group, about one-third of enrollees, were entitled to an additional refund averaging $365. The cause in both cases were incorrect estimates of annual income. H&R Block suggests that when individuals signed up for Obamacare, they were probably using their 2012 income as a guide. If their income went up in 2014, then the subsidies they were eligible for would decrease. The difference shows up on their tax returns as a debt owed the IRS.
H&R Block also notes that the average penalty for failure to obtain insurance was $172, nearly double the minimum penalty of $95. Next year the penalty for non-compliance will go up to $325, or two percent of one’s income.