The Affordable Care Act has undergone multiple legislative and administrative changes since enactment in 2010. Here’s the status of several of the tax provisions.
- Individual penalty. The penalty for not having health insurance remains in effect, and will be due when you file your 2014 federal income tax return next year. The amount you’ll owe is 1% of your modified household income or a flat dollar amount, whichever is greater, unless you’re exempt or qualify for an exception.
- Individual premium tax credit. If you chose to receive premium reductions in advance in the form of payments sent directly to your insurer during 2014, you will need to reconcile the amount paid on your behalf with the amount you were eligible to receive.
- Employer penalties. The $2,000 per-employee penalty for failing to offer affordable health insurance was delayed, and will not apply until 2015 when you employ 100 or more full-time-equivalent workers. When your workforce numbers 50 to 99, the penalty is delayed until 2016. As before, there’s no penalty when you employ fewer than 50 full-time workers.
- Small Business credit. The federal tax credit for up to half of the cost of health insurance premiums for coverage you offer employees is still available for 2014, even if your state has not yet established a Small Business Health Options Program (known as a SHOP marketplace).
To qualify for the credit, you must employ fewer than 25 full-time equivalent workers whose average wages are less than $50,800. In addition, you must pay 50% of the premium cost for employee-only coverage.
Have questions on how these or other aspects of the Affordable Care Act will impact you or your organization? Contact us – we are happy to help.