Taxpayers given the wrong information about their Obamacare subsidies will be able to keep the extra money in their refunds without having to refile their tax forms, a Treasury Department spokesperson said Tuesday.
Approximately
800,000 taxpayers got wrong information about calculating tax subsidies, the Obama administration said last week, while stressing that most Obamacare customers got the right forms, reports
The Hill.
The administration asked taxpayers to delay filing their taxes until the correct forms were mailed out in early March, but some 50,000 people already had filed, and it was not clear if they would be forced to refile their forms.
On Tuesday, the Treasury Department announced that people who paid too much in taxes will have an option to file an amended return to get that money refunded, but people who paid too little because of the wrong information will be allowed to keep the extra money coming into their refunds.
Treasury has not said how many people have paid the wrong amounts or how much money is involved.
"The IRS will not pursue the collection of any additional taxes from these individuals based on updated information in the corrected forms," a spokesman said. "Individuals may want to consult with their tax preparers to determine if they would benefit from filing amended returns."
The
glitch was caused by a coding error, an official confirmed earlier this week, causing subsidies to be miscalculated for 20 percent of the Obamacare-related tax forms by incorrectly listing 2015 data instead of 2014 data, the result "of an intermittent defect in the code that was used to create these forms."
Meanwhile, most Obamacare customers who got the subsidies last year must pay back some of the money to the IRS, according to tax-prep giant H&R Block, reports
The Washington Times.
H&R Block reports that 52 percent of the people who used the subsidy underestimated their income for 2014 and will have to repay an average of $530 from their tax refunds, cutting the money they'll get back by an average of 17 percent.
"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 healthcare and tax services.
One-third of H&R Block's clients overestimated their incomes, and will get $365 more back, on average, with an Obama administration official saying those people will get "the actual refund they deserve."
But H&R Block says it predicted that most of its customers would not be accurate with their 2014 incomes, with many using their 2012 income to apply for insurance in the fall of 2013.
Meanwhile, most taxpayers are being honest about their insurance status, paying the tax penalty for being uninsured, H&R Block says.
"We don’t think they are just checking the box that they are covered when they’re not," Ciaramitaro told The Times.
Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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