Important Supreme Court Decisions Affecting ACA and Same-Sex Marriage
The U.S. Supreme Court has handed down two much-anticipated decisions: one on the Affordable Care Act’s key provision, the Code Sec. 36B premium assistance tax credit; and another on same-sex marriage nationwide. In King v Burwell, SCt, June 25, 2015 (2015-1 ustc ¶50,356), the Court ruled 6 to 3 that the Code Sec. 36B credit is available to enrollees in both federally-facilitated and state-run Exchanges (currently commonly referred to as Marketplaces). In Obergefell v. Hodges, SCt, June 26, 2015 (2015-1 ustc ¶50,357), the Court ruled 5 to 4 that the Fourteenth Amendment requires a state to license a marriage between two people of the same sex and to recognize a marriage between two people of the same sex when a marriage was lawfully licensed and performed out of state. Both decisions have far-reaching tax consequences.
Guidance on Forthcoming Required Employer Notice on Health Care Coverage Options
The Employee Benefits Security Administration (EBSA) has issued guidance about the written notice that certain employers must provide to employees beginning in October on health care coverage options.
Changes to Schedule M-3 Filing Requirement for Corporations and Partnerships for 2014
On its website, IRS has announced that corporations and partnerships with assets between $10 million and $50 million will be allowed to file Schedule M-1 in place of the Schedule M-3, Parts II and III, effective for tax years ending on Dec. 31, 2014 and later. These changes to the Schedule M-3 filing requirement will affect corporate returns Forms 1120, 1120-C, 1120-F, and 1120S, and partnership returns Forms 1065 and 1065-B. No changes are planned to the Schedule M-3 requirements for Forms 1120-L or 1120-PC, or for Form 1120 taxpayers filing as a mixed group.
2014 TAX YEAR WILL BENEFIT FROM ADDITIONAL TAX BREAKS
In the recently enacted “Tax Increase Prevention Act of 2014 (TIPA),” Congress has once again extended a package of expired or expiring individual, business, and energy provisions known as “extenders.” The extenders are a varied assortment of more than 50 individual and business tax deductions, tax credits, and other tax-saving laws which have been on the books for years but which technically are temporary because they have a specific end date. Congress has repeatedly temporarily extended the tax breaks for short periods of time (e.g., one or two years), which is why they are referred to as “extenders.” The new legislation generally extends the tax breaks retroactively, most of which expired at the end of 2013, for one year through 2014.
Legal Update: Substantiation Requirements for Charitable Contributions
This tax update is a case study originally presented in Thompson Reuters Checkpoint Federal Taxes Weekly Alert Newsletter (10/9/2014, Volume 60, No. 41)
Fringe Benefit Items to Include on 2014 Forms W-2
As 2014 draws to a close, we would like to remind you about the proper inclusion of fringe benefits in an employee’s and/or shareholder’s taxable wages. Fringe benefits are defined as a form of pay for performance of services given by a company to its employees and/or shareholders as a benefit. Fringe benefits must be included in an employee’s pay unless specifically excluded by law. Please note that the actual value of the fringe benefits provided must be determined prior to December 31 in order to allow for the timely withholding and depositing of payroll taxes. Below you will find important information regarding the identification and accounting for several customarily provided fringe benefits.
Year-End Tax Planning for Individuals
With the end of the year rapidly approaching, it’s time to consider planning moves that could reduce your 2014 taxes. Year-end planning is particularly challenging this year because a host of popular individual tax breaks expired at the end of 2013. Congress has traditionally retroactively extended the vast majority of these temporary tax breaks after they expired. However, as we complete this letter, Congress has not yet extended these tax provisions.
IRS Launches Voluntary Classification Settlement Program
If you have independent contractors in your office, you need to pay attention to an employment tax settlement program launched by the IRS—the Voluntary Classification Settlement Program (VCSP). This program allows employers to reclassify as employees those workers they have erroneously treated as independent contractors. The program has generous payment terms, and participants get relief from employment tax audits for previous years.
CHANGED HIPAA RULES APPLICABLE TO GROUP HEALTH PLANS AFTER 2013 UNDER THE ACA
As a result of the Patient Protection and Affordable Care Act (Affordable Care Act) as it relates to requirements imposed by the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and other related acts, there are changed requirements for your group health plan. These HIPAA requirements include HIPAA’s “portability” rules that restrict a health plan’s ability to exclude individuals based on pre-existing conditions, and “access” rules prohibiting plans from excluding individuals based on their health status. These rules have largely been eliminated by the Affordable Care Act, except for individual health plans that retain “grandfathered“ status (that is, those plans in existence on September 23, 2010, that have not been modified or renewed). HIPAA’s rules regarding privacy and security of “private health information” continue and remain unaltered by the Affordable Care Act.
Tax Planning for College
As a parent with college-bound children, you are likely concerned with setting up a financial plan to fund future college costs. If your children are already college age, your goal is to pay for current or imminent college bills. This alert addresses both of these concerns by suggesting several approaches that seek to take maximum advantage of tax benefits to minimize your expenses. (Please note that the following suggestions are strictly related to tax benefits. You may have non-tax-related concerns that make the suggestions inappropriate.)
