Credit Jonathan Ernst/Reuters
WASHINGTON — Obama administration officials and other supporters of the Affordable Care Act say they worry that the tax-filing season will generate new anger as uninsured consumers learn that they must pay tax penalties and as many people struggle with complex forms needed to justify tax credits they received in 2014 to pay for health insurance.
The White House has already granted some exemptions and is considering more to avoid a political firestorm.
Mark J. Mazur, the assistant Treasury secretary for tax policy, said up to six million taxpayers would have to “pay a fee this year because they made a choice not to obtain health care coverage that they could have afforded.”
But Christine Speidel, a tax lawyer at Vermont Legal Aid, said: “A lot of people do not feel that health insurance plans in the marketplace were affordable to them, even with subsidies. Some went without coverage and will therefore be subject to penalties.”
The penalties, approaching 1 percent of income for some households, are supposed to be paid with income taxes due April 15. In addition, officials said, many people with subsidized coverage purchased through the new public insurance exchanges will need to repay some of the subsidies because they received more than they were entitled to.
More than 6.5 million people had insurance through the exchanges at some point last year, and 85 percent of them qualified for financial assistance, in the form of tax credits, to lower their premiums. Most people chose to have the subsidies paid in advance, based on their projected income for 2014. If their actual income was higher — because they received a raise or found a new job — they will be entitled to a smaller subsidy and must repay the difference, subject to certain limits.
“If the advanced premium tax credit amount is too high, the taxpayer could have an unwelcome surprise and owe money,” said Nina E. Olson, the national taxpayer advocate at the Internal Revenue Service.
Many people awarded insurance subsidies for 2014 did not realize that the amount would be reviewed and recalculated at tax time in 2015.
Consumers are sure to have questions, but cannot expect much help from the tax agency, where officials said customer service had been curtailed because of budget cuts.
The 2015 filing season could be the most difficult in decades, officials said. Ms. Olson said new paperwork resulting from the Affordable Care Act would probably exacerbate problems with customer service, which “has reached unacceptably low levels and is getting worse.”
“The I.R.S. is unlikely to answer even half the telephone calls it receives,” she added. “Taxpayers who manage to get through are expected to wait on hold for 30 minutes on average and considerably longer at peak times.”
Timothy S. Jost, an expert on health law at the Washington and Lee University School of Law who supports the Affordable Care Act, said: “It will be very easy to find people who are unhappy with the new tax obligations — people who have to pay a penalty, who have to wait forever to get through to somebody at the I.R.S. or have to pay back a lot of money because of overpayments of premium tax credits.”
Taxpayers normally report income and compute taxes annually. But the health care law is different. Consumers may be subject to tax penalties for any month in which they had neither insurance coverage nor an exemption.
The calculations will be relatively simple if all members of a household had coverage for every month of 2014. They can simply check a box on their tax return. But lower-income people often have changes in employment, income and insurance. If any members of a household were uninsured in 2014, they must fill out a work sheet showing coverage month by month, and they may owe penalties.
To claim tax credits, consumers need to fill out I.R.S. Form 8962, which includes a matrix with 12 rows and six columns — a total of 72 boxes, to compute subsidies for each month of the year.
Federal officials have authorized more than 30 types of exemptions from the penalty for not having insurance. One is available to low-income people who live in states that did not expand Medicaid. Another is available to people who would have to pay premiums amounting to more than 8 percent of their household income. The government will also allow a variety of hardship exemptions and in most cases will require taxpayers to send in documents as evidence of hardship.
The open enrollment period, during which people can sign up for health insurance in the public markets, ends on Feb. 15. But many people will not realize that they must have coverage or pay a penalty until they file their tax returns in April.
Obama administration officials said they were considering a “special enrollment period” that would give some people extra time to obtain insurance. But they said consumers could not count on an extension of the Feb. 15 deadline and should not delay signing up.
Health plans are classified in five categories, such as gold, silver and bronze, based on how comprehensive the coverage is. To calculate their tax credits, consumers need to know the cost of their own health insurance policies, but must also know the cost of a benchmark plan, the second-lowest-cost silver plan. To claim an exemption if the available coverage was unaffordable, they also need to know the premium for the lowest-cost bronze plan in the area in 2014.
Sylvia Mathews Burwell, the Department of Health and Human Services secretary, said the administration was working with nonprofit groups like AARP and tax preparation companies like H & R Block, Jackson Hewitt and Intuit, the maker of TurboTax software, to help people meet their tax obligations under the health care law.