Tax Tip of the Week | No. 277 | NCCPAP Warns of Impact of ACA on Tax Season
Tax Tip of the Week | Nov 19, 2014 | No. 277 | NCCPAP Warns of Impact of ACA on Tax SeasonHere is a recent article we thought you would like....
The National Conference of CPA Practitioners is warning that the complexities of the Affordable Care Act may negatively affect millions of taxpayers in the upcoming tax season.Many taxpayers are unaware that their refund may be reduced or delayed -- or even vanish entirely – due to issues tied to the act, the organization says, and many may find themselves confused by the new forms and reporting requirements.“The 8 million-plus taxpayers who purchased health insurance on the Exchange may be in for an unpleasant surprise,” said CPA Stephen Mankowski, who is chair of NCCPAP’s Tax Policy Committee in a statement. Many of them received an Advanced Premium Tax Credit, which subsidized their premiums, but any number of life changes -- including a raise, a new job, getting married or getting divorced – could render them ineligible for the credit. “Essentially these life changes could cause a taxpayer to lose the subsidy, resulting in an increase in said taxpayer’s taxes, a loss of refund or a balance due.”Taxpayers who received the credits will need to reconcile them against their current circumstances – a complicated process. And all taxpayers will need to answer questions regarding their minimum essential coverage. They will also receive new forms whose purpose is unclear to them. “Taxpayers don’t know what they don’t know,” Mankowski said. “The IRS is not aware of the potential fallout that could occur over the confusion regarding these forms, and most tax preparers are frankly unprepared.”“It is our opinion that the lack of widespread knowledge on this issue is because the new ACA related forms -- and their instructions -- were only recently released in draft form by the IRS; some were released as late as Oct. 15, 2014,” he continued. “No date has been set for the release of the final forms and instructions. This could delay the start of the filing season, which will delay the processing of those still eligible for refunds.”As a result, NCCPAP is recommending that the government delay implementing this part of the ACA for one year, to give tax preparers time to set proper expectations with their clients.There may be a lot of unhappy taxpayers this upcoming tax season----Please don’t shoot the messenger!
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