If you got health insurance subsidies last year, and you’re worried that you got too much in federal tax credits and will be faced with a huge tax bill for repayment, then you can worry a little less: The IRS says that people who are liable for repayment (“clawback”) of excess subsidies won’t have to pay by April 15.
It’s not relieving you of the obligation to repay; it’s just saying that you won’t be liable for a penalty if you don’t repay by the deadline. Interest will continue to accrue, but the interest rates that the IRS charges are actually pretty reasonable (and probably much better than what your credit card company charges). It’s the failure-to-pay penalties it layers on top — half a percentage point a month, with even stiffer penalties for failing to file — that really make your tax bill add up fast.
The IRS emphasizes that this is a one-time-only deal, just for 2014. But I’m not sure if you should believe that. This emphasizes one of the problems we’ve spoken about a lot in this space: The political will to impose the costs of the Affordable Care Act is a lot less strong than the will to distribute the benefits…
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