Many have predicted that Patient Protection and Affordable Care Act (PPACA) tax provisions would make the 2014 personal income tax filing season a nightmare.
The Internal Revenue Service (IRS) created elaborate tax forms with even more complicated looking instructions.
PPACA and Obama administration regulators set complicated rules for who can use PPACA advance premium tax credits (APTCs) to pay for PPACA exchange plan coverage, how much exchange plan buyers can get, and what happens when the APTC users get too little APTC help or too much.
PPACA imposes a “shared responsibility” penalty on consumers who fail to have what regulators think of as being as “minimum essential coverage” for enough of the year, and Obama administration officials created a complicated set of exemptions from the individual coverage mandate penalty, along with complicated processes for using the exemptions.
So far, however, the only nightmare tax preparers are reporting is a lack of panicked taxpayers crowding their waiting rooms.
The tax preparers are talking about customers organized enough to come in by mid-February, not the stragglers who will rush in with paper bags full of receipts at 4:55 p.m. April 15.
But, for the tax preparers’ observations about how well-organized customers are handling PPACA-related issues, read on.
1. Early in the tax season, taxpayers were not swarming into preparer offices.
Liberty Tax Inc. (Nasdaq:TAX) has put out a press release apologizing to its investors for the current disappointing lack of a PPACA-related flood of customers.
Through Feb. 13, the company served 0.1 percent fewer customers than it did during the same period in 2014.
John Hewitt, the Liberty Tax chief executive officer, said in a statement that he thinks PPACA will provide tailwinds for tax preparers for the next several years. “However, we have seen minimal impact so far this season,” Hewitt said. “We believe we will see more impact in the second half of the season as more ACA filers come in to have their returns prepared.”
See also: HHS extends PPACA enrollment for some.
2. For taxpayers who owe the no-coverage penalty, the average penalty is a lot more than $95.
Early on, official summarizers of PPACA and the individual mandate penalty described the penalty in such a way that even people who paid close attention to PPACA regulatory developments thought the 2014 penalty for people who lacked “minimum essential coverage” (MEC) would be $95.