IRS to Waive Penalties for Taxpayers Who Owe Taxes because of Obamacare

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The U.S. Internal Revenue Service will waive some penalties for taxpayers who owe taxes because of Obamacare.

The changes, announced Monday in Washington, apply only to people who received subsidized health insurance during 2014. On tax returns, they must reconcile eligibility for the credit with their actual income and pay back some of the subsidy if they received too much.

That can happen if someone got a higher-paying job or a raise during 2014 and didn’t ask the government to alter the subsidy.

The IRS will waive penalties for making that payment late or for failing to pay estimated taxes throughout 2014.

Taxpayers must send in a letter for a penalty waiver. They still must pay the taxes within a year and will owe interest after April 15, the due date for individual tax returns.

Click here to read more

Source: Bloomberg | Richard Rubin

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