There are many tax provisions in the health care bill signed into enactment Monday. Some of these provisions go into effect immediately, and some extend into 2017. The Journal of Accountancy provided some of the highlights of the tax provisions, including:
Premium Assistance Credit – provides for refundable tax credits that eligible taxpayers can use to help cover the cost of health insurance premiums for individuals and families who purchase health insurance through a state health benefit exchange
Small Business Tax Credit – provides tax credits for small businesses and individuals designed to increase levels of health insurance coverage, as part of the IRC § 38 general business credit. Small businesses—defined as businesses with 25 or fewer employees and average annual wages of less than $40,000—would be eligible for a credit of up to 50% of nonelective contributions the business makes on behalf of their employees for insurance premiums (new IRC § 45R). Tax-exempt organizations would get a 35% credit against payroll taxes.
Expansion of Adoption Credit – For 2010, the maximum adoption credit is increased to $13,170 per eligible child (a $1,000 increase). This increase applies to both non-special needs adoptions and special needs adoptions. Also, the adoption credit is made refundable. The new dollar limit and phase-out of the adoption credit are adjusted for inflation in tax years beginning after Dec. 31, 2010.
The article lists many more provisions, as well as fines such as:
Fees on Health Plans – a fee is imposed on each specified health insurance policy. The fee is equal to two dollars (one dollar in the case of policy years ending during fiscal year 2013) multiplied by the average number of lives covered under the policy. The issuer of the policy is liable for payment of the fee.
More on this and other changes with the Act can be found on the Journal Of Accountancy’s website, and as always, Blackman & Sloop CPAs, P.A. is here to assist with decoding and defining the ever changing laws in order to help you and your business needs. If you’d like to speak to a professional, give us a call at 919-942-8700 today.
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