The Patient Protection and Affordable Care Act

Transcription

1 Patient Protection and Affordable Care Act-Tax Implications and Expiring Tax Provisions in 2014 Arkansas Chapter HFMA October 31, 2014 Presented by John Ed Welch, Partner, CPA The Patient Protection and Affordable Care Act a/k/a Affordable Care Act ACA PPACA Obama Care 1

2 ACA Implementation March 23, 2010, ACA was signed into law after passing in both houses without a single republican voting to support the bill Health Care and Education Reconciliation Act of 2010 Signed into law on March 30, 2010 Purpose was to correct and amend many provisions of the ACA Added other provisions primarily related to Student Loan Reform 2

3 Implemented in 2010 Provided qualifying small business some heath insurance tax credits Eliminated top heavy health insurance claims that discriminate in favor of highly compensated employees Implemented in 2010 Imposes a 10% excise tax on indoor U.V. tanning services Extension of the Adoption Tax Credit Extended group health insurance coverage to a child of parent covered in group plan through age 26 and possible tax implication 3

4 Implemented in 2010 New Simple Cafeteria (Section 125) Plan Various non-tax related provisions of the ACA Implemented in 2010 Provisions of the ACA Implemented in 2011 Reporting of health care cost on W-2s Changes in HSA s & Archer (MSA s) over the counter drugs Other provisions implemented in

5 Implemented During 2012 No provisions that impacted income tax Various miscellaneous provisions Implemented During 2013 New Medicare payroll tax New Medicare tax on investment income Increased the AGI Floor for medical deductions from 7 ½% to 10% New 2.3% excise tax on certain medical devices 5

6 Implemented in 2014 Individual mandate Penalty for failure to acquire coverage and enforcement of the collection of penalty Increase the small business tax credit Implemented in 2014 Health Insurance Exchanges Subsidies Expansion of Medicaid Private Options in Arkansas Employer Mandate 6

7 Implemented in 2014 Four basic plans including the Bronze Plan, Silver Plan, the Gold Plan and the Platinum Plan Cadillac Plan excise tax to start in 2018 Implemented in 2014 Enforcement of the employer mandate defined 2015 for employers with more than 99 full time employees 2016 for employers with at least 50 but less than 100 employees 7

8 Tax Provisions Implemented During 2013 American Taxpayer Relief Act (ATRA) so called Fiscal Cliff Act of 2012 implemented in 2013 Increased the top marginal tax rate Increased the top rate on capital gains Tax Provisions Implemented During 2013 Increased the top tax rate on qualified dividends A phase-out of itemized deductions, exemption allowances and other credits and deductions Increased top estate tax rate to 40% from 35% Permanently indexed AMT to inflation 8

9 Tax Provisions that Expired at the End of 2013 Above the line deduction for education expenses up to $250 Itemized deduction of state and local sales tax Itemized deduction for mortgage insurance premiums Residential energy efficiency tax credit of $500 Tax Provisions that Expired at the End of 2013 Credit for energy efficient appliances Credit for plug-in electrical drive vehicles Research & Experimentation (R&D) tax credit Work opportunity tax credit 9

10 Tax Provisions that Expired at the End of 2013 $2000 per home credit permitted to contractors who build energy efficient homes 15 year straight line depreciation for qualified restaurant buildings 50% bonus depreciation Sec. 179 expense deduction is reduced from a maximum of $500,000 per year to $25,000 Tax Provisions that Expired at the End of 2013 Tax free distribution of up to $100,000 from an IRA to a 501(c)(3) charitable organization Reduction of holding period for built in gains tax on Sub-S corporations Exclusion from income related to discharge of indebtedness on primary residence 3 year depreciation for race horses 2 years old, will now be 7 years 10