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Tag Archive for Obamacare

Premium Tax Credit Saga – New Developments And Dilemmas

On Friday (11/7/14), the US Supreme Court granted cert in King v. Burwell, 759 F.3d 358, No. 14-1158 (4th Cir., 7/22/14). This is the case where the court found the IRS regulations allowing individuals to claim a premium tax credit (PTC), even if they obtain coverage on a federal exchange rather than a state exchange. In contrast, in Halbig v. Burwell, 758 F.3d 390, No. 14-5018 (DC Cir., 7/22/14), a divided court found the IRS regulation invalid. The King and Halbig decisions were issued on the same day in July.

In September 2014, the Eastern District Court of Oklahoma issued a decision, State of Oklahoma v. Burwell, No. CIV-11-30-RAW (ED Ok, 9/30/14), finding the regulations invalid.

The DC Court of Appeals vacated its July decision, agreeing to hear the case en banc. Read more

Tax Compliance Alert: IRS Prepares For Impact of Obamacare On 2015 Tax Season


On Wednesday, September 10th the Internal Revenue Service (hereinafter the “Service”) Commissioner John Koskinen (hereinafter “Commissioner Koskinen”) informed a congressional subcommittee about the Service’s progress on the Affordable Care Act and the impact that tax subsidies will have on the upcoming 2015 tax season. In a hearing before the House Ways and Means Health Subcommittee, Commissioner Koskinen discussed how the Service would be processing the premium tax credit, which helps subsidize the cost of health insurance coverage for eligible taxpayers.

Commissioner Koskinen duly noted that eligible taxpayers can choose to have their Read more

Top 5 2013 US Expat Tax Updates for Americans Living Abroad

The tax season is upon us and as expats begin the arduous task of gathering documents for their US tax preparation, it seems like a good time to provide an overview of the 2013 tax changes that may impact expats. The most important impact may be saving money, so let’s take a closer look!

1)     The Foreign Earned Income Exclusion (FEIE)

We love that the Foreign Earned Income Exclusion adjusts for inflation each year! Last year the FEIE was $95,100 and this year it jumps to $97,600. This means you deduct the first $97,600 you earn—you could eliminate your entire US tax liability with this credit alone. However, it’s important to remember that you must ‘qualify’ as an expat to be Read more

Next Year Double Digit Health Plan Increases

Consumers eligible for Obamacare health plans could see double-digit price hikes next year in states that fail to draw large numbers of enrolls for 2014, according to insurance industry officials and analysts.

The early estimates come as insurance companies set out to design plans they intend to sell in 2015 through the state-based health insurance marketplaces that are a centerpiece of the Affordable Care Act, President Barack Obama’s signature domestic policy achievement that is widely referred to as Obamacare.

WellPoint Inc, which sells plans on 14 Obamacare exchanges, expects health insurance rates nationwide to be higher. Increases for the Obamacare market that has signed up Read more

Expatriate Year End Tax Planning

Year-end tax planning could be especially productive this year because timely action could nail down a host of tax breaks that won’t be around next year unless Congress acts to extend them, which, at the present time, looks doubtful. These include, for individuals: the option to deduct state and local sales and use taxes instead of state and local income taxes; the above-the-line deduction for qualified higher education expenses; and tax-free distributions by those age 70-1/2 or older from IRAs for charitable purposes.

Some areas to draw your attention are listed below:


High-income-earners have other factors to keep in mind when mapping out year-end plans. Read more

US Citizens Abroad and OBAMACARE

Commencing January 1, 2014, the “Affordable Care Act”, more derisively known as “OBAMACARE” will require that Americans carry so-called “minimum essential health coverage” (basically, health insurance) or suffer payment of a tax penalty. The provision applies to any individual who is a United States citizen or who qualifies as US “resident” for federal income tax purposes (e.g., a green card holder or one who meets the so-called “substantial presence” test). The rules apply to those individuals of all ages, including children. The married couple or adult who can claim a child or another individual as a dependent for federal income tax purposes is responsible for making the payment if the dependent does not have the required health coverage or if an exemption does not apply.

An important exemption exists for certain US persons who are living and working abroad if Read more

Taxes and Penalties in the 2012 Affordable Health Care Act

The 2012 “Affordable Health Care Act” (Obama Care) [The Act] contains many provisions for penalties and additional taxes for businesses that do not provide health care coverage for their employees. Health care coverage is mandated for businesses employing a certain number of “full-time” employees. It also imposes penalties on individuals who do not have health care coverage. Businesses have until January 1, 2015 to comply and individuals until March 31, 2014. There is legislation pending in Congress to extend the individual mandate until January 2015.

This article will discuss the Act’s ramifications, particularly for small businesses, in determining if they are required to cover employees with health insurance and penalties for failure to do so. A Even businesses that provide insurance today may get caught up under Read more

Government Shutdown, One Tax Provision In Debt Ceiling Deal

TaxConnections Picture - Debt CeilingWednesday’s deal to fund the federal government through January 15 and to extend the federal government’s borrowing authority through February 7 in the end contained only one tax provision, making a minor change to 2010’s health care legislation. The agreement, H.R. 2775, was passed by the Senate in an 81–18 vote on Wednesday and by the House of Representatives in a 285–144 vote. President Barack Obama is expected to sign it immediately, without an increase in the debt ceiling, since a U.S. debt default could happen soon.

A separate part of the agreement, not included in the bill but made in a separate Senate motion, will create a framework for formal budget negotiations. These will be scheduled to conclude by December 13, with negotiators charged with making recommendations for long-term budget and deficit reduction goals.

The change to the health care law under the agreement reached Wednesday sets up a new requirement that the eligibility of people who receive cost-sharing reductions under Section 1402 of the Patient Protection and Affordable Care Act, P.L. 111-148, or the health insurance premium tax credit under Sec. 36B, be verified. Under the agreement, the secretary of Health and Human Services must ensure that health insurance exchanges verify that individuals applying for the credit or cost-sharing Read more

Columbus Day – Taxes, The Government Shutdown And ObamaCare

TaxConnections Picture - Columbus ShipToday is Columbus Day. Growing up it was an important holiday but now Columbus is being derided for all of his various faults. My son, who is in the 8th grade and has an extremely inspiring history teacher, came home and told me that “Mrs. M does not think we should celebrate Columbus Day.” He went on to tell me that Leif Erickson actually discovered America and that Columbus spread disease and tortured Native Americans.

What he didn’t say was that Columbus also demanded tribute from the Indians, stole their gold, enslaved some of the Indians and brought them back to Spain as objects of curiosity. He also didn’t discuss the brutality and all of the other negative things that can be brought up about Columbus. Thank heavens!

Those who pooh-pooh Columbus bring up the fact that most educated Europeans in the late 15th century knew that the world was a sphere and not flat. But the fact was, like the great inventors and explorers of humanity, Columbus took theoretical knowledge and applied it. Yes, there were some professors in the universities of the time talking about astronomy and geography, and postulating a variety of theories. Columbus took that theory and said that he was going to discover a shorter route from Europe to India to get at the spices, gold and other valuable items less expensively and safer than going around the Cape of Africa. While the intelligentsia was simply talking, Columbus was doing.

Leif Erickson, obviously a great Viking explorer, went from Northern Europe to North America more than 400 years before Columbus. He simply went home and did nothing about it. On the other hand Columbus, not only the adventurer and Read more

TaxConnections Worldwide Tax Blogs Traffic Soars On Posts Related To “Obama Care”

TaxConnections CEO and Blogger Kat Jennings posts high traffic with Obama Care PostsTraffic on blogs related to Obama Care have recently soared due to consumers interest in tax increases associated with the new healthcare plan. With more than one billion consumers going online for tax advice each year, TaxConnections Worldwide Tax Blog has grown into a valuable resource for tax information.

“Our site traffic increased 20X over the last six months, we are paying close attention to what is trending. Obama Care posts send our traffic soaring through the roof. People want to be informed about the tax increases associated with Obama Care, in a language they can understand, and that is what we give them at TaxConnections”, states Kat Jennings, Founder and CEO of TaxConnections, a niche authority site of tax experts. There are numerous tax hikes that accompany Obama Care that largely affect families and small businesses that include:

1) Investment Income 3.8 Surtax on income earned over $200,000 for single head of households, and $250,00 for income earned on combined households over $250,000. The 3.8% Surtax does not apply to Non-Resident Aliens.

2) Individual Mandate Excise Tax and Employer Mandate Tax, states that anyone not buying “Qualifying Health Insurance” must pay an income surtax of 1%-2.5%. If an Employer does not offer health care coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-time employees. This applies to all employers with fifty or more employees. If any employee Read more

Tax Provisions Of The 2012 American Health Care Act – Part 3

TaxConnections Blogger Harold Goedde posts about the affordable care actThis article will discuss the tax provisions enacted as part of the Act and its implications and hardships that will be created for businesses and individuals.

Penalties (Taxes) on Large Businesses

Under the ACT, starting January 1, 2015 (this provision was to start January 1, 2014 but was postponed by President Obama), large businesses (employing 50 or more) are required to purchase health coverage for all full-time employees (more than 30 hours per week or, if the employer elects, at least 130 hours of service per month) [Prop. Regs. Sec 54.4980H-(a)(18)]. The 50 employee requirement is determined by the sum of all full-time employees and full-time equivalents for each calendar month in the preceding year, divided by 12. If the result is 50 or more, the employer is a large employer for the calendar year unless a seasonal worker exception applies. [Sec. 498H(c)(2)]. If employees are paid by the hour, actual hours of service are used. For non-hourly employees, the employer must count actual hours or apply an equivalent of eight hours daily or 40 hours per week, provided the method used does not substantially understate the employees hours of service that would cause the employees not to be treated as full time [Prop. Regs. Sec 54.4980H-(3)(b)]. To determine the 30 hours per week requirement, individually, but, in combination, are counted as full-time solely to determine if an employer is a large employer. The number of full-time employees is determined by calculating the average number of monthly hours of service by all employees who worked less than full-time (capped at 130 hours for any single employee) divided by 12 [Prop. Regs. Sec 54.4980H-(2)(c)] . The employer is considered to offer health care coverage to full-time employees and their dependents for a calendar month if, for that month, it offers such coverage to at least 95% of its full-time employees and their dependents [Prop. Regs. Sec 54.4980H-(4)(a)]. The previous information was taken from “Prop. Regs. Clarify ‘Play or Pay’ Rules of the Affordable Care Act”, The Tax Adviser, May 2013. Read more