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Affordable Care Act

Most IRS Regulations Exempt from President’s “2-for-1” Executive Order

President Trump recently signed an Executive Order (EO) aimed at reducing regulation. One of the main provisions of this EO requires two existing regulations be cut in exchange for every new regulation introduced.

Interim guidance on implementing this “2-for-1” rule appears to limit its power to “significant” regulatory actions, a category not inclusive of most IRS regulations.

The determining factor for whether a regulatory action qualifies as significant depends on EO 12866, signed by President Clinton. It defines a “significant regulatory action” as “any regulatory action that is likely to result in a rule that may:

  • Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;
  • Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;
  • Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or
  • Raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in this Executive order.”

Per the Government Accountability Office, tax regulations seldom prove “significant” by the Office of Information and Regulatory Affairs, thus only few become subject to additional review and analysis under EO 12866.

IRS and Treasury officials rarely designate tax regulations as economically significant since any financial impact generally stems from the underlying statute, not the regulation.

In fact, between 2013 and 2015, only one of more than 200 tax regulations issued fell under the category of significant.

By limiting the EO to “significant” regulatory actions, most IRS regulations remain excluded from its requirements, including the 2-for-1 rule.

For help in tax planning, or business and personal income tax returns, the experienced accounting team at Patrick & Robinson CPAs is always here for you.  Contact us at Office@CPAsite.co, or 904-396-5400.

Wondering about reporting your health care on your tax return?

Recent news reports highlight the likely repeal of the Affordable Care Act (ACA; i.e., “Obamacare”) with the inauguration of President Trump. Whatever changes occur will likely not affect your need to report your health care coverage on your 2016 tax return.

The IRS provided an easy-to-understand If/Then chart for reference:

IF YOU…

Are a U.S. citizen or a non-U.S. citizen living in the United States

THEN YOU…

Must have qualifying health care coverage, qualify for a health coverage exemption, or make a payment when you file your income tax return.


IF YOU…

Had coverage or an employer offered coverage to you in the previous year

THEN YOU…

Will receive one or more of the following forms;

This information will help you complete your tax return.


IF YOU…

Received health coverage through an employer or under a government program – such as Medicare, Medicaid and coverage for veterans – for the entire year

THEN YOU…

Just check the full-year coverage box on your Form 1040 series return and don’t need to read further.


IF YOU…

Did not have coverage for any month of the year

THEN YOU…

Should check the instructions to Form 8965, Health Coverage Exemptions, to see if you are eligible for an exemption.


IF YOU…

Were eligible for an exemption from coverage for a month

THEN YOU…

Must claim the exemption or report an exemption already obtained from the Marketplace by completing Form 8965, Health Coverage Exemptions, and submitting it with your tax return.


IF YOU…

Did not have coverage and were not eligible for an exemption from coverage for any month of the year

THEN YOU…

Are responsible for making an individual shared responsibility payment when you file your return.


IF YOU…

Are responsible for making an individual shared responsibility payment

THEN YOU…

Will report it on your tax return and make the payment with your income taxes.


IF YOU…

Need qualifying health care coverage for the current year

THEN YOU…

Can visit HealthCare.gov to find out about the dates of open and special enrollment periods for purchasing qualified health coverage.


IF YOU…

Enroll in health insurance through the Marketplace for yourself or someone else on your tax return.

THEN YOU…

Might be eligible for the premium tax credit.


IF YOU…

Received the benefit of more advance payments of the premium tax credit than the amount of credit for which you qualify on your tax return

THEN YOU…

Will repay the amount in excess of the credit you are allowed subject to a repayment cap.


IF YOU…

Did not enroll in health insurance from the Marketplace for yourself or anyone else on your tax return

THEN YOU…

Cannot claim the premium tax credit.


IF YOU…

Are eligible for the premium tax credit

THEN YOU…

Can choose when you enroll in coverage to get premium assistance sent to your insurer each month to lower your monthly payments or get all the benefit of the credit when you claim it on your tax return.


IF YOU…

Are claiming the premium tax credit and did not benefit from advance payments of the premium tax credit

THEN YOU…

Must file a tax return and IRS Form 8962, Premium Tax Credit (PTC) and claim the credit on the line labeled – Net premium tax credit.


IF YOU…

Choose to get premium assistance when you enroll in Marketplace coverage

THEN YOU…

Will have payments sent on your behalf – to your insurance provider. These payments are called advance payments of the premium tax credit.


IF YOU…

Get the benefit of advance payments of the premium tax credit and experience a significant life change, such as a change in income or marital status

THEN YOU…

Should report these changes in circumstances to your Marketplace when they happen.


IF YOU…

Get the benefit of advance payments of the premium tax credit

THEN YOU…

Will report the payments on your tax return and reconcile the amount of the payments with the amount of credit for which you are eligible.


 

We can only wait to see what will happen in 2017, and you can trust the experienced tax team at Patrick & Robinson CPAs to stay current on the developments that will affect you.

We’re here to help! Contact us at: Office@CPAsite.com or 904-396-5400.

Are You Eligible for the Premium Tax Credit?

The premium tax credit (PTC) can be claimed on the individual income tax return of people who are enrolled in a qualified health plan through a Health Insurance Marketplace.

If this scenario describes you, you may be eligible for the credit. To find out, access the IRS’ website and answer a series of yes-or-no questions. You may wonder if your household income is at least 100% but not more than 400% of the federal poverty line; the IRS offers a chart with guidelines for the federal poverty line for different sized families. (You may have to scroll down to see it.)

Reaching the end of the questions does not ensure you will receive a credit. You must then review the instructions and complete Form 8962. File it with your 2016 income tax return.

An alternative to using the yes-or-no flowchart is to use the Interactive Tax Assistant. Be sure to assemble all the information the site says is needed before beginning.

If you’re not yet signed up for a health plan, the Health Insurance Marketplace is currently in open enrollment season. Hurry though, because it’s available only through Jan. 31, 2017. (If you need coverage to start Jan. 1, sign up by Dec. 15.)

This information is provided as a service from the healthcare accounting team at Patrick & Robinson CPAs, which has served the business community and individuals with complex tax needs since 1982. We can be reached at Office@CPAsite.com or 904-396-5400.

From your CPA team, Happy Independence Day!

As we celebrate the 240th anniversary of the signing of the Declaration of Independence, let’s remember the courage of those who paved the way for a new Nation and those today who sacrifice everything for our freedom.

Despite the complex tax code, the American story is simple: our bravery, resiliency and enterprise remain unmatched. We face new challenges, but our history shows when we act as “one nation” and we unleash our unmatched spirit, we persevere and grow stronger every time.

On our country’s birthday, let’s celebrate and honor our heroes in all areas: military, emergency service personnel, commerce, statecraft, religion and nonprofits. Thanks to them, we’re blessed with unmeasurable opportunity, freedom and pride.

From your tax accountants at Patrick & Robinson CPAs, Happy Independence Day!

ACA Deadline Approaching! Healthcare Accounting for Your Business

In light of the ACA reporting, some businesses try to stay under the 100 full-time equivalent (FTE) employee threshold (50 FTE for 2016) for group insurance compliance by excluding workers. Workers must meet several standards to be exempt, especially proving independence.

If your company ranks above the FTE threshold, you must provide Form 1095-C to each employee by March 31, 2016 (expect the deadline to be earlier in 2017). Visit our recent blog to determine if you reach that threshold.

Many payroll service providers handle this task, but not all. If you prepare your payroll in house or your service provider will not issue Form 1095-C, plan how to handle this important new reporting responsibility.

In addition, all employers must provide Form 1095-B to each employee who receives group insurance coverage, again by the end of March, showing the level and cost of that benefit. Most insurers provide these forms for you, but if they don’t, your company assumes responsibility to distribute them.

The IRS expects you to send the information on Form 1094-B. Remember, issuing Form 1095 is a requirement subject to substantial penalties, so documentation is critical.

If you need help with your ACA filings or other tax-related issues, the Patrick & Robinson CPAs team can help with its decades of accounting experience. Contact us at (904) 396-5400 or Office@CPAsite.com.

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