Posts Tagged - ‘tax refund’

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Will Your Tax Refund Be Garnished For Health Insurance Penalties?

Thursday, April 8th, 2010

(Image: alykat under CC 3.0)

There are varying opinions regarding how the health insurance mandate will be enforced. The Internal Revenue Service is entrusted with the task. However, high-ranking IRS officials have stated that they do not intend to pursue criminal charges against those who fail to buy a health insurance plan or pay a penalty, nor will they garnish wages or seize assets. Despite accusations that they will hire several thousand new agents for enforcement purposes, the IRS denies that that will happen.

One of the tactics they are considering: taking the fine out of your annual income tax refund. The penalties, which could be up to 2% of a person’s income by 2016, would only be subtracted from refunds as a last resort, if someone fails to pay beforehand. Those with incomes which make them eligible for subsidies will receive tax credits to reduce their obligation. Critics believe that the enforcement of the individual health insurance mandate has almost no teeth. This move is an exception, but may be an unpleasant surprise to those unprepared.

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