People without access to the job based health insurance can get private insurance cover with the law as it offers tax credits, but consumers must accurately estimate the income they will make for the coming year as these subsidies are tied to their income. It is the biggest challenge for millions of people.
If the guess made is low than their income then they will get help with premiums but later owe money at filing time. Overestimate income; expect money back from the taxman.
Consumers are facing problem with its working.
Rob Tuck of Dublin, California, said he anticipated a refund of $400 in 2014 from taxes but couldn’t avail that much as he had to repay some subsidy because his income was more than he had estimated during the tax filing. He changed job during the year and his income went up.
“I was expecting to get dinged a little bit, but I was actually kind of surprised when it came down that much,” he said.
Kelsey Park has overestimated her income and her tax refund came as $2,500, partly because she had too much income tax withheld and partly because she received a smaller health care subsidy than she was entitled to.
She said, “It was hard to estimate what I would be earning because I was transitioning in life, who’s studying for a master’s degree in marketing. “I tend to overestimate because I don’t want to have to pay back.”