IRS Posts Affordable Care Act Tax Data

One major health law tax, the additional Medicare tax, affects wages and self-employment income. To calculate the tax, a single taxpayer multiplies 0.9% times any affected income over a $200,000 threshold. A couple multiplies 0.9% times affected income over a $250,000 threshold.

That tax took effect in 2013.

A second major health law tax, the 3.8% net investment income tax, affects net investment income for taxpayers with high modified adjusted gross income. The MAGI threshold is $200,000 for individuals and $250,000 for couples. The tax applies either to the taxpayer’s net investment income or to the difference between the MAGI threshold and the taxpayer’s modified adjusted gross income, whichever is less.

Like the additional Medicare tax, the net investment income tax took effect in 2013.

(Image: Centers for Medicare and Medicaid Services)

The IRS says 3.6 million taxpayers owed the additional Medicare tax in 2015, and 3.8 million owed the net investment income tax.

Taxpayers who owed the additional Medicare tax owed an average of $2,413, down from an average of $2,434 in 2014.

Taxpayers who owed the net investment income tax owed an average of $4,806, down from an average of $4,938 in 2014.

High-Income Premium Tax Credit Subsidy Users

The IRS breaks the items in the 2015 tax return data down by income level.

In theory, high-income users of the Affordable Care Act premium tax credit user should be very rare, because the tax credit is supposed to serve only taxpayers who earn less than four times the federal poverty level, or $98,400 per year for a family of four in most of the United States.

In reality, consumers who use the advance premium tax credit to pay for health coverage while the tax year is still underway must predict what their income for the coming year will be when they apply for the tax credit.

Some taxpayers may lie about what they will earn, and some may end up earning much more than they think they will.

The IRS found 15,001 taxpayers who used the advance premium tax credit in 2015 and ended up earning more than $200,000 in 2015. Most premium tax credit users who earn more than they expect during a tax year are supposed to pay at least part of the subsidy help they get back to the IRS when they file their income taxes. Subsidy users who end up earning more than $200,000 during tax year would, generally, have to repay all of they subsidy help they received during the tax year.

— Read IRS Struggles to Enforce Employer Health Mandate on ThinkAdvisor.