Susan Tompor

Detroit Free Press

A significant benefit of the Affordable Care Act is the opportunity to receive money-saving tax credits up front to cut the overall cost of health insurance, but now hundreds of thousands of consumers could owe back some of that money next April.

Those affected took advance payments of the premium tax credit for health insurance. Some married couples could owe $600 or $1,500 or $2,500 or even more. It might feel like a raw deal for some who are already suffocating under the escalating costs of health insurance.

"Health insurance is confusing enough, and now they're adding the complexities of the Tax Code," said Lorena Bencsik, a member of the Michigan Association of CPAs and owner of Prime Numbers in Ferndale.

When you file that 2014 tax return next year, the Internal Revenue Service will compare your actual income for the year with the amount you estimated when applying for exchange-based health insurance under the health insurance law.

The next open enrollment period begins Nov. 15. But notices were sent this week to some consumers whose incomes don't match up to such things as 2012 tax return information.

On Monday, the Centers for Medicare and Medicaid Services said at least 279,000 households reported incomes that still don't match what the government has on record. Supporting documents are needed by Sept. 30.

What can you do to avoid tax-time problems?

Experts say people need to realize early on that they should report changes in income and other changes in one's life, such as a marriage, throughout the year. See HealthCare.gov to report "income and life changes."

Of course, many people may have no idea that they'd need to report changes.

The IRS put out some more details on the issue mid-month.

What should you report? A move, an increase or decrease in income, a marriage or divorce, the birth or adoption of a child, whether you started a job that offers health insurance and whether you gained or lost eligibility for other health care coverage.

Best spots for information: HealthCare.gov and IRS.gov/aca.

Karen Pollitz, senior fellow with the Kaiser Family Foundation, said many people who qualify for these tax credits aren't working 9-to-5 jobs with regular salaries. So guesstimating one's income for the coming year can be very tough.

"It's people in transition. Maybe they're in and out of work," she said. Or maybe they're self-employed.

People who lose a job would want to report that change during the year, as well, because that change can lead to a higher advance payment for the credit.

"Life changes can drive tax changes," said Mark Steber, chief tax officer for Jackson Hewitt Tax Service.

Steber stressed that people need to make sure to update information via HealthCare.gov or their state insurance exchanges.

The Kaiser Family Foundation site has a calculator to help figure out potential tax credits, based on one's situation.

Premium tax credits are available to individuals and families with incomes between 100% of the federal poverty line ($23,550 for a family of four this year) and 400% of the federal poverty line ($94,200 for a family of four) who purchase coverage in the health insurance marketplace in their state.

The tax credits are paid directly to the insurer, if taken in advance. People are not required to take the entire credit in advance. Realistically, if you cannot afford insurance, you'd need some credit in advance.

To be sure, there are some caps on the amount filers must pay back and the cap is based on household income. The cap ranges from $300 to $1,250 for some single taxpayers and $600 to $2,500 for married taxpayers, again based on income.

But if the income is 400% or more above the poverty line, there is no cap and the taxpayer must pay back the full amount.

Rules exist for qualifying for the premium tax credit: You must buy health insurance through the marketplace; you're not eligible for coverage through an employer or government plan; your income must be within certain limits; you do not file a married-filing-separately federal tax return (unless you meet certain exceptions, such as victims of domestic abuse and spousal abandonment) and you cannot be claimed as a dependent by another person.

The actual credit would vary based on how close your are to the federal poverty level, your age, the size of your family and where you live.

Sadly, it's fair to say some people will see some unexpected, unpleasant surprises on their tax returns next year.

Contact Susan Tompor at stompor@freepress.com. Follow her on Twitter @tompor.