Health Care Will the Affordable Care Act Impact My Tax Refund? Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by Magaly Olivero Published Feb 13, 2015 - [Updated Jul 23, 2019] 2 min read If you purchased health insurance in the Health Insurance Marketplace in 2014 and received an advanced premium tax credit or you were required to purchase health insurance and did not in 2014, you may see a difference in your tax refund, however either situation will not necessarily reduce your tax refund. In fact, if you received an advanced premium tax credit that was too low you may see a bigger tax refund. Advanced premium tax credits If you’re among the millions of people who received discounted coverage from the Health Insurance Marketplace, you may see a bigger premium tax credit if your estimated income was overstated and you received too small a tax credit to offset the cost of monthly insurance premiums. On the other hand, you may see a lower actual premium tax credit or get a smaller tax refund if your income estimate was too low when you applied for 2014 health insurance. Why the adjustments? When you prepare your 2014 taxes, your actual premium tax credit allowed is compared to your advanced premium tax credit received in 2014 based on your estimated income. Remember, TurboTax searches for valuable tax credits and deductions that may also offset excess premium tax credits you owe. Penalty relief for excess tax credits Taxpayers who can’t pay the balance on their 2014 taxes due to an excess advanced premium tax credit may be able to receive some penalty relief. They may not need to pay the late payment for the balance due or the penalty for underpaying estimated taxes as long as they file their 2014 taxes. Tax penalty for the uninsured People who were uninsured may face a tax penalty – unless they qualify for an exemption. The tax penalty for 2014 is $95 per person and $47.50 per child (capped at $285 for families) or 1 percent of your taxable household income – whichever amount is larger. If you owe a tax penalty, the penalty is deducted from your tax refund or the sum is added to the total balance you owe. The IRS, however, can’t use liens and levies to collect the penalty on people who remained uninsured. Report life-changing events To avoid surprises at tax time, promptly report changes to your income or family circumstances to the federal or state-run Marketplaces so your account can be adjusted. TurboTax does not charge extra to file Affordable Care Act tax forms. With TurboTax you can easily file your taxes and report your health care coverage under the Affordable Care Act. Previous Post The Costs of Going Without Health Insurance Under the Affordable… Next Post Dependent Basics: Who Can I Claim as a Dependent? Written by Magaly Olivero Magaly Olivero is an award-winning writer and has written for many national and regional media outlets, as well as corporate and nonprofit clients in the healthcare, tax and education industries. Her publishing credits include U.S. News and World Report, Newsweek, The New York Times, Working Woman, Better Homes and Gardens and the Connecticut Health Investigative Team. Magaly is a recipient of a National Journalism Fellowship from the University of California Annenberg School of Communication and a Health Coverage Fellowship from the Blue Cross Blue Shield of Massachusetts Foundation. More from Magaly Olivero Leave a ReplyCancel reply Browse Related Articles Tax Deductions and Credits TurboTax Answers the Top 5 Commonly Asked Tax Questions… Health Care How Income and Family Size Changes Impact Your Health I… Health Care Health Care, Taxes, and You: What Subsidies Offset Hea… Health Care Still Need to File Your 2015 Taxes? File Now to Get You… Health Care Obamacare and Taxes: How are They Connected? Health Care Affordable Care Act Update: Millions of Americans Can … Health Care Start Planning Early: New Affordable Care Act Forms Yo… Health Care Look Ahead When Shopping for Discounted Health Insuranc… Health Care Health Care, Taxes, and You: I received an advanced pr… Tax Planning Save the (Tax) Dates!