Speaking on H&R Block’s quarterly earnings conference call, CEO William Cobb said that the company was already taking steps to train its tax preparers based on the draft forms that the Internal Revenue Service has released to comply with Obamacare.
“As expected, the forms are very detailed and can present significant complexity, depending on a filer’s coverage status during the year, income level, and household composition,” Cobb said. “Depending on their situation, there are instances where filers may need to file multiple new tax forms and complete additional worksheets.”
Starting with next year’s tax season, individuals who do not have health insurance that meets federal requirements will be subject to penalties. But there are various categories of individuals who could be exempted.
“Depending on the type of exemption, the process to claim it could be quite cumbersome and time consuming,” Cobb said.
In addition, many taxpayers who received subsidies to purchase health insurance through Obamacare could be forced to repay the federal government if, due to a miscalculation of their income, they received larger subsidies then they were entitled to under the law.
Cobb said people who are used to filing the pared down 1040-EZ will no longer be able to do so if they received any subsidies.
Some investors have predicted that H&R Block’s business could receive a boost if added complexity brought about by Obamacare increases demand for tax preparation services.