FACTBOX-U.S. IRS preparing key rules ahead of healthcare law
WASHINGTON, March 22
WASHINGTON, March 22 (Reuters) - President Barack Obama's 2010 healthcare law left many tax details to be worked out by the U.S. Internal Revenue Service.
Here are some of the key issues ahead for the IRS as the law nears implementation in 2014.
EMPLOYER HEALTH INSURANCE MANDATE
- Beginning in 2014, businesses with 50 or more full-time employees must pay the IRS $2,000 for each full-time employee not provided by the company with health coverage. The first 30 employees are excluded from the fee.
- Businesses face the same tax if the coverage they offer is unaffordable or does not provide "minimum essential" coverage.
- Proposed IRS regulations for these "pay or play" rules will be the topic of an IRS hearing on April 23.
- Beginning in 2014, businesses with 50 or more full-time employees must tell the IRS and state healthcare insurance exchanges about the coverage of employees and their dependents.
- It is unclear how specific the information will be and what additional forms, if any, employees will have to fill out.
- The IRS has been inundated with comment letters on this issue. No regulations have been released yet by the agency.
MINIMUM HEALTH COVERAGE
- The law offers a tax credit for insurance premiums paid, based on a percentage of income, for low- and middle-income individuals. The credit is meant to help people buy insurance on their own in the insurance marketplaces.
- The rules on this were released in January. The IRS in March requested feedback about minimum healthcare coverage, which will determine who is eligible for the tax credit.
- A public hearing is scheduled for May 29, 2013.
HOSPITAL INSURANCE 0.9 PERCENT TAX
- Starting this year, high-income earners now pay an additional 0.9 percent Medicare payroll tax on incomes over $200,000 for individuals and $250,000 for couples. That comes on top of the previous Medicare tax.
- The IRS in December issued proposed rules that explain how to calculate the tax and report a tax liability.
UNEARNED INCOME 3.8 PERCENT TAX
- This is a new tax on investment income, such as capital gains and dividends, of 3.8 percent, on top of the current 20 percent tax, also for higher-income groups.
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