Affordable Care Act tax provisions
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In 2014, the Internal Revenue Service (IRS) introduced a host of tax provisions to accommodate the Affordable Care Act.
Robert W. Wood wrote in
Premium Tax Credits
The Premium Tax Credit (PTC) is a
Cost-sharing subsidies
Households with (Modified Adjusted Gross) income of 100-250% of the
Starting in 2014 all tax-filers must have healthcare insurance.
Tax-filers who obtain qualifying healthcare insurance receive a
Individuals who were not insured during the tax year are required to make a payment when filing their tax return, unless they qualify for a
The New York Times reported in February 2015 that up to six million uninsured taxpayers are expected to have to pay a penalty for not obtaining health insurance in 2014.[6]
Americans residing outside the United States
Americans permanently residing outside the United States are exempt from the requirement to obtain health coverage in the United States. However they must file
American citizens and American residents residing outside the United States
American citizens and American residents residing outside the United States for part of the year can also get an exemption but only if they reside outside the U.S. for more than 330 full days during a twelve-month period.[7]
Canadians residing in the United States part of the year
There have been some changes that may affect Canadians who reside in the United States part of the year:
- In June 2014 a new cooperative program between Canada and the United States titled the Entry/Exit Initiative of the Perimeter Security and Economic Competitiveness Action Plan went into effect.
- If a Canadian person spends more than 182 days within a calendar year in the United States, they may considered a U.S. Person for tax purposes under IRS rules.
- Canadians who spend more than 182 days within a calendar year in the United States, can try to overturn U.S.-person-status by filing Form 8840no later than June 15 of the year the tax return must be filed.
- Being a U.S. person may have damaging tax effects on Canadians, because they must file U.S. tax returns on their world-wide income(even if none of the income is derived in the United States).
- Even those who owe no tax may be faced with large costs associated with filing complicated tax returns in both Canada and the United States, including such forms such as form 8965.[8]
Small Business Health Care tax credits
Starting in 2015
Net investment income tax
Higher income taxpayers, as well as taxpayers with sources of income that are defined as net investment income in the statute, pay an additional 3.8% tax to offset the costs of the Affordable Care Act.
See also
References
- ^ Wood, Robert W. "Obamacare Tax Filing Backlash: There Will Be Blood". Forbes. Retrieved 2016-09-02.
- ^ "Extenders to drive week — Get ready for Microsoft vs. IRS showdown — IRS expands tax evasion crackdown to Singapore". POLITICO. Retrieved 2016-09-02.
- ^ Founder, Christina LaMontagne; Health, NerdWallet (2014-12-02). "How Can I Find Out If I Qualify for Discounted Health Insurance?". The Huffington Post. Retrieved 2016-09-02.
- ^ Greene-Lewis, Lisa; Cpa, Cpa; Manager, the TurboTax Blog (2014-12-10). "How Health Care Reform Will Affect Your 2014 Taxes (The Ones You File On April 15, 2015)". The Huffington Post. Retrieved 2016-09-02.
- ^ "10 biggest income tax changes to plan for in 2016". USA Today. Retrieved 2016-09-02.
- ISSN 0362-4331. Retrieved 2016-09-02.
- ^ "Obamacare In Canada - Tax - Canada". www.mondaq.com. Retrieved 2016-09-02.
- ^ Wilson, Matthew (May 2014). "MITIGATING U.S. TAX EXPOSURE THROUGH THE CLOSER CONNECTION STATEMENT" (PDF). collinsbarrow.com. Collins Barrow. Retrieved 2016-09-01.
- ^ See I.R.C. § 1411(a), et seq.
- ^ Dore, Kate (July 5, 2023). "Millions of high earners pay this investment income tax every year. Here's how to avoid it". CNBC. Retrieved January 22, 2024.
- ^ "Questions and Answers on the Net Investment Income Tax". IRS.gov. Internal Revenue Service. Retrieved 30 July 2020.