obamacare irs tax implications

7/29/2019 Obamacare IRS Tax Implications

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Obamacare IRS Tax Implications

As tax season looms on the verge for all Americans, I will be the first person to admit I am not atax person. As I analyze various portions of the affordable care act aka Obamacare here is my

take on the top 10 tax implications. Its still unknown the massive impact it will have on theUnited States tax system, and how the IRS will follow-up with individuals regarding fines. OnJune 29 th

The Affordable Care Act, was upheld through the US Supreme court. The Courts decision was based on the individual mandate being a tax penalty, which allowed the federal governmentto administer the mandate, even though Medicaid Expansion was left to the states. The mostcontentious part of the The Healthcare Reform Bill was upheld By a vote of 5-4, The courtspecifically stated the requirement to buy health insurance can not be mandated by thefederal government, and the government does not have the right to force citizens to purchase aproduct, especially across state lines. However the federal government does have the right to levy

taxes, and as such chief Justice Roberts made the deciding vote, crossing party lines touphold the Affordable Care Act , Obamacare as the law of the land, and for the time beinglimiting future federal court actions by the states. The remain justices vote 4-4 between upholdingand striking down the Affordable Care Act

The Affordable care act goals of insuring an additional 25 million Americans will be accomplishedthrough mainly two avenues. 1) Medicaid Expansion which was deemed to be a states choice by the Supremes, and the Individual mandate, which requires everyone to either have healthinsurance through an employer, private exchange or pay a Health Insurance Tax The penalty will

be phased through 2016. Even though the Affordable Care Act invites individuals to purchasehealth insurance if they do not, a fee will be assessed, by the IRS

I logged onto the IRS website to see what theyre take is on these provisions, and the latest updateregarding tax fines for the Affordable Care Act, here is what I have so far. This is a truncatedlist, Please free to log on to the IRS site yourself for a full explanation on these key provisions,maybe you can give me some further details on what they mean. Below are 10 Tax provisions, that

will ultimate effect you financially.

10 Obamacare Tax Provisions

Medicare Part D $250 Rebate

The Affordable Care Act will allow a one time $250 rebate in 2010 to assist Medicare Part Drecipients whose medicare drug coverage gap has been met. This Rebate payment will not betaxable, thus allowing you to full benefit from the $250. This payment will be recieved from theInternal Revenue Service. Please visit Medicare.gov for more information.
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Obamacare Flexible Spending Accounts (FSA)

Most of us have probably experience this if we have an FSA account. Starting in 2011 the cost of an over-the-counter medicine or drug cannot be reimbursed from Flexible Spending

Arrangements ( FSAs) or health reimbursement arrangements unless a prescription is obtained.

Simple things such as Tylenols, and cold medicine are no longer reimbursable through an FSA account. This does not affect insulin, even if purchased without a prescription. The changesexcludes other expenses such as medical devices, eye glasses, contact lenses, co-pays anddeductibles. This standard went into effect for all purchases made after Jan. 1, 2011. The samerules went into effect on Jan. 1, 2011, for Health Savings Accounts (HSAs), and Archer MedicalSavings Accounts (Archer MSAs)

Starting in January 2013 , The amount that can be contributed towards FSA will bedecreased. Notice 2012-40 provides information about these rules and flexibility for employersapplying the new rules.

Obamacare Excise Tax on Tanning

Moving forward a 10% tax will be placed on all indoor tanning services. This Affordable Care Acttax, was one of the first things that went into service, due to the size of the tanning population notmuch fuss was made. The tax will be charged on quarterly basis. Through Quarterly FederalExcise Tax Return. There is an exception for gyms that may offer tanning services as part of amembership package.

Obamacare Adoption Credit

The Affordable Care Act, promotes adoption by raising the maximum adoption credit amount to$13,360 this is up from $12,150 from 2009. The tax credit will be refundable from the previous

year, i.e. if you're a eligible taxpayer, you can get it as a cash refund even if you owe no tax. Thecredit is focused on helping with all the fees and expenses associated with adoptions such ascourt, attorney, travel and other expenses associated with completing a legal adoption. It isrecommend for all qualifying taxpayers to include legal adoption documents to helpfacilitate receiving the the refund.

Obamacare Dependent Children Coverage Age

expandedThe Affordable Care Act, makes it possible for parents to keep their children on their healthInsurance policies until they are 27. However the The Affordable Care Act now make it tax free forparents to pay for that additional premium, before parents would have to pay taxes on theadditional cost ensuring a dependent child pass the age requirement. These changes immediately allow employers with cafeteria plans plans that allow employees to choose from a menu of tax-free benefit options and cash or taxable benefits to permit employees to begin making pre-tax
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contributions to pay for this expanded benefit. This also applies to self-employed individuals whoqualify for the self-employed health insurance deduction on their federal income tax return.

Obamacare Medical Device Excise Tax

A 2.3% percent tax will now be charged on all medical device. This will be known as asthe medical device excise tax. This tax will be levied on all manufactures and importers of medicaldevices. These individual companies will pay the sales tax starting in January 2013.

Obamacare Small Business Health Care Tax Credit

Due to the Affordable Care Acts requirement for all small businesses to provide insurance fortheir employees based on the number of employees on the books. There will now be a

small business tax credit, this is aimed at helping and encouraging small employers to offerinsurance coverage for their employees. the credit is available to small employers that pay at leasthalf the cost of single coverage for their employees.There will also be a Health InsuranceTax for companies that do not provide health insurance benefits

Obamacare Reporting Employer Provided HealthCoverage in Form W-2

In order to provide greater transparency to the cost of Health Coverage in America, The Affordable Care Act now requires employers to report the cost of health coverage under anemployer plan within the employees W-2 form, box 12 using code DD. This is the form you getevery year that aids you in filing your tax return. Note: This amount does not have any impact on

your tax liability or taxes, this is for employees information purpose, and help keep consumersmore informed.

Obamacare Medicare Shared Savings Program

In order to help reduce overall healthcare cost, The Affordable Care Act establishes a Medicareshared savings program (MSSP) encouraging Accountable Care Organizations (ACOs) to facilitate

better, and more cooperation among providers in effort to improve the quality of care provided toreduce unnecessary costs. Please read Notice 2011-20 for more details.

Obamacare Health Insurance Premium Tax Credit

Starting in 2014, individuals and families will be eligible for various tax subsidies Please usethis Health Insurance Tax Calculator to calculate if you qaulify. Individuals and families can takea new premium tax credit to help them afford health insurance coverage purchased through an
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Affordable Insurance Exchange . The Medicaid requirements in various states that will be part of the Medicaid Expansion program will now be available. Exchanges will operate in every state andthe District of Columbia. The premium tax credit is refundable so taxpayers who have little or noincome tax liability can still benefit. On May 18, 2012, the final regulations were issued by the IRS, this regulation, provides guidance for individuals who enroll in qualified health plans through

Exchanges and claim the premium tax credit, and for Exchanges that make qualified health plansavailable to individuals and employers.

All exchange laws and requirements will not be effective until 2014

Ihealthcareupdates.com provides the latest news and updates related to theAffordable Care Act and its implementation as well as other news updates on healthcare related items in the United States. To be informed of the latest news andupdates related to the Affordable care Act please visit Ihealthcareupdates.com
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