Helpful Tax Updates and Reminders

With new provisions of the Affordable Care Act scheduled to go into effect, here are some updates and reminders that you should be aware of, along with links to more information and resources regarding each update.

IRS Website Explains Tax Provisions of the Health Care Law; Provides Guide to Online Resources

The IRS has launched a new Affordable Care Act Tax Provisions website at IRS.gov/aca to educate individuals and businesses on how the health care law may affect them. The new home page has three sections, which explain the tax benefits and responsibilities for individuals and families, employers, and other organizations, with links and information for each group. The site provides information about tax provisions that are in effect now and those that will go into effect in 2014 and beyond. Topics include premium tax credits for individuals, new benefits and responsibilities for employers, and tax provisions for insurers and certain other business types.

For more information, visit IRS Health Care Tax Tip 2013-01.

Obama Administration Postpones Large Employer Health Care Mandate Until 2015

The Obama Administration has announced that it is postponing for a full year, until 2015, the Patient Protection and Affordable Care Act’s (PPACA) mandatory employer and insurer reporting requirements. As a result of not obtaining this reporting information in 2014, the administration also announced that it will waive the imposition of any employer-shared responsibility penalty payments for 2014. This effectively means that employers with 50 or more employees will not be required to provide health insurance to their employees or face a penalty until 2015.

For more information on this postponement, visit the US Department of Treasury’s Treasury Notes Blog.

DOL Issues Model Exchange Notice and Sets Compliance Deadline

Beginning Jan. 1, 2014, individuals and employees of small businesses will have access to insurance coverage through the Affordable Care Act’s (ACA) health insurance exchanges (Exchanges), which are also known as Health Insurance Marketplaces. Open enrollment under the Exchanges will begin on Oct. 1, 2013. ACA requires employers to provide all new hires and current employees with a written notice about ACA’s Exchanges. This requirement is found in Section 18B of the Fair Labor Standards Act (FLSA). The DOL also set a compliance deadline for the Exchange notices. Employers must provide employees with an Exchange notice by Oct. 1, 2013.

More information can be found at the United States Department of Labor Technical Release No. 2013-02.

Work Opportunity Tax Credit Extension Due to Expire December 31, 2013

The American Taxpayer Relief Act of 2012 (ATRA) extended the Work Opportunity Tax Credit (WOTC) for hiring certain workers through Dec. 31, 2013.

The VOW to Hire Heroes Act of 2011 made changes to the Work Opportunity Tax Credit (WOTC), including adding new categories to the qualified veteran’s targeted group. The VOW Act also extended the WOTC for qualified veterans hired before Jan.1, 2013.  The other targeted group categories were not extended by the VOW Act and expired for targeted group members other than qualified veterans hired after Dec.31, 2011. 

All employers must obtain certification that an individual is a member of a targeted group, before the employer may claim the WOTC. To obtain certification, employers must file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit. 

For more information, please visit the Internal Revenue Service’s website.