Today the Supreme Court upheld the individual insurance mandate found in the 2010 Patient Protection and Affordable Care Act as constitutional. So what does this mean for business owners and individuals?
This historic decision means that health care changes and additional taxes included in Obama Care will go into effect over the next few years, and affect all Americans. The Internal Revenue Service (IRS) will be responsible for administering many of the rules of Obama Care. This law will have changes for both businesses and individuals, and we will be informing you of the changes as information is released.
The following is a brief summary of some of the changes you can begin to expect:
There will be an additional 0.9% into the Medicare Payroll Tax – this will start in 2013
A new Medicare Tax of 3.8% on unearned income – this will start in 2013
More Medical Expense deductions – this will start in 2013
A Minimum Essential Coverage Penalty – this will start in 2014
Premium Assistance Credit – this will start in 2014
Nondeductible Penalty (starts 2014): Large employers with 50 or more full-time employees will be required to pay a penalty if any full-time employee is certified as having purchased health insurance through an exchange.
Additional Reporting Requirements (starts in 2014). All employers must report additional information to the IRS on the health care coverage offered, and employees covered. Additionally, health care costs are required to be reported on Form W-2s.
Pascarella & Associates will be reviewing the impact of this landmark decision and its affect on your taxes over the coming weeks and months ahead. This is one isolated component of the many changes we anticipate in the U.S. tax law before the end of the year. We will be working on planning opportunities to consider as the health care reform and other tax provisions evolve over the next few months.
Keep watching our blog for other updates and relevant articles.