IRS Fines 8 Million Americans, 0.3 Million of Them From Low Income Group
The Internal Revenue Services (IRS) has released on late Friday afternoon that around 1.4 million households failed to properly account their tax returns. The revealed preliminary figure is related to the households receiving financial aid against health insurance during last year under Obama's new healthcare laws.
Department of Health and Human Services (DHHS) believes most of the affected people have health law coverage no longer. This will pose their subsidies at risk of remaining out of health aid benefit.
Obama administration has been reported to embattle with potential complication while striving to increase enrolling during 2016. Complicated Tax issues address the difficulties of the health law for the very people it's intended to serve, reports The Seattle Times.
The new Obama Care Law allows tax credits to assist people in paying premiums for private insurance roughly up to the three-fourths. Through funneling financial assistance to the income tax system, Democrats have been successful to address the largest tax cutting call from the middleclass tax payees, reports Mail Online.
The IRS estimation for 1.4 households those failed to address 2014 tax returns includes three major groups. The first group of around 316,000 households has received tax credits paid to them in advance but haven't reportedly filed any return at all last year. Before the health care law, many low-income people have been excused from filing tax returns.
The second phase involves some 976,000 households that got tax credits and filed 2014 returns, but omitted a new form that is the key to accounting for their subsidies. The Form 8962 has been introduced for the 2015 tax filing season.
However, the third strata aggregate around 147,000 households those have been requested for extensions to file their 2014 taxes, but never followed through. The consumers with tax issues represent about 30 percent of the 4.6 million households that received tax credits, reports Digital News World.
11.3 million people have reportedly so far been enrolled for 2016 coverage with three weeks still left in the health law's sign-up season. But a key independent census has showed that progress reducing the number of uninsured Americans under the law stalled last year, so every customer counts this time around.
As per the existing health law, all Americans are subject to carry insurance and the uninsured face fines if they can afford coverage. But nearly 8 million uninsured individuals and families has paid penalties averaging about $210 each.
Of them, 313,000 are from the low-income group legally exempted from coverage requirement. However, they will be able to get their money refunded by filing an amended return.
Obama Care or the new Federal Health Care law provides tax credits up to the two-thirds of total insurance premium amount. The move aims to bring all Americans under insurance coverage instructing people to submit a tax return. The law applies to all even who remain out of tax network for poor income. Some 313,000 people from low income portfolio have been reported to count fines in violation of Obama Care Law.