Individual mandate raises taxing questions

BenefitsPro reports:

“2015 marks the first year that taxpayers will have to prove they have health insurance or, if they don’t, they’ll have to pay a penalty. But how is the proof presented?

About half the adult population might not know the answer to this, according to a Harris Poll commissioned by Intuit TurboTax. The TurboTax folks had Harris poll more than 2,000 adults, and 48 percent didn’t know they’ll be required to declare their health coverage status on their 2014 tax return.

In fact, the survey revealed a fair amount of ignorance when it came to matters involving health insurance. Examples of the gaps in respondents’ knowledge included:

  • 87 percent don’t realize the deadline to avoid a tax penalty for 2014 has passed.
  • 56 percent of those without health insurance were unaware that uninsured individuals who meet certain criteria may qualify for an exemption from the Patient Protection and Affordable Care Act tax penalty.
  • 45 percent didn’t know about the existence of discounts called premium tax credits designed to make health insurance less expensive for low-to-moderate income families.
  • 38 percent of uninsured Americans didn’t know that those without insurance purchased for 2014 will have to pay a penalty.

“These numbers indicate that even with open enrollment in full swing many Americans still do not know the correlation between their health care and taxes,” said Sacha Adam, the Affordable Care Act product leader for TurboTax. “We are committed to bridging this gap by providing taxpayers with free, easy-to-use tools and resources that help them realize how their health care decisions affect their taxes and household finances.”