Affordable Care Act Reminders for Tax Year 2016 Returns

Though the new Congress and Administration may substantially change the requirements for the Affordable Care Act, its current provisions remain in place for 2016 returns.

As we approach the beginning of the 2017 filing season here are some reminders about the Form 1095-A, exemptions from the requirement to have health insurance, and the increase in the individual penalty (individual shared responsibility payment) amount for 2016 federal income tax returns.

Importance of Form 1095-A

The Form 1095-A (Health Insurance Marketplace Statement) will be received by approximately 10 million individuals that obtained their 2016 health insurance at the Federal or a State Marketplace.

This form is needed in order to complete the 2016 Form 8962 (Premium Tax Credit) which calculates their Premium Tax Credit for 2016 and, for those who received a subsidy, to complete the reconciliation of the subsidy with the actual credit. Read more

Health Care Coverage Exemptions

Most individuals who did not have health insurance for all or part of 2016 probably qualified for an exemption. Therefore, it is important that before any penalty is calculated that an individual determines whether they may qualify for a health care coverage exemption.

If an individual qualifies for a health care coverage exemption they must complete the applicable parts of the 2016 Form 8965 (Health Coverage Exemptions) and include it with their 2016 federal tax return. Read more

Individual Penalty (Shared Responsibility Payment) for 2016

If it is determined that an individual does owe a penalty for Tax Year 2016, it is calculated as the greater of:

• 2.5% of the individual’s income that exceeds their 2016 filing threshold (personal exemptions plus standard deduction for their filing status);
  Or
• A flat dollar amount that is assessed for the taxpayer, spouse, and dependents as follows:
• $695 per taxpayer, spouse, and dependents over age 18
• $347.50 for each dependent under age 18

The maximum family flat dollar amount for 2016 is $2,085. Read more

Click here to read the entire CrossLink Tax Update that includes further information about the Form 1095-A, exemptions from the requirement to have health insurance, and the increase in the individual penalty amount for 2016 federal income tax returns.

IRS Warns of Fake Tax Bill Emails

The IRS wants to make taxpayers and tax preparers aware that a new email scam has been reported around the country. This new scam involves fake emails that include an attached fraudulent version of IRS CP2000 notices for Tax Year 2015.

The fraudulent CP2000 notice includes a payment request that taxpayers mail a check made out to “I.R.S.” to the Austin Processing Center at a Post Office Box address. This is in addition to a payment link within the email itself.

The IRS wants to emphasize that the CP2000 is a notice commonly mailed to taxpayers through the US Postal Service. It is never sent as part of an email to taxpayers. The details of this scam are as follows:

• Notices are being sent electronically.
• The CP2000 notices appear to be issued from an Austin, Texas address.
• The notice is requesting information regarding Affordable Care Act insurance coverage for 2014.
• The payment voucher lists the letter number as 105C.

See the IRS and Security Summit Partners Warn of Fake Tax Bills news release of September 22, 2016 for more information.

Affordable Care Act – New Information Forms and How the ACA Relates to the Federal Tax Return

Below is an overview of the Affordable Care Act (ACA) related forms and the new information forms that all individuals who had health insurance in 2015 will receive during this coming filing season.

New Information Forms for the Upcoming 2016 Filing Season
There will be two new ACA related information forms that all taxpayers who had health insurance during 2015 will be receiving towards the end of March or early April of this coming filing season.

Since these two new information forms will be received late in the filing season, it is important to emphasize that they are for informational purposes only and are not needed to complete an individual’s 2015 federal tax return. Their purpose is to show individuals that they had health insurance during 2015, who was covered by their policy, and how many months they had coverage. They are essentially their proof that they had coverage during the year.

Form 1095-B (Health Coverage)
All individuals who had health insurance during 2015 will receive a Form 1095-B (Health Coverage) around the end of March 2016 from the insurance company that provided them coverage.

The Form 1095-B will give the individual policy holder the following information:

• The name, address, and SSN of each person covered by the policy
• The number of months each person was covered during the year
• The name of the health insurance issuer
• Name of Employer (if it is employer sponsored coverage)

Form 1095-C (Employer Provided Health Insurance Offer and Coverage)
All individuals that received health insurance from a company that had 50 or more full-time employees will receive a Form 1095-C (Employer Provided Health Insurance Offer and Coverage) around the end of March 2016.

The Form 1095-C will inform the employee of the following information:

• Name, address, and SSN of the employee
• Name and SSN of the employee’s dependents that were covered and for which months they were covered during 2015
• Name, address, and EIN of Employer
• For those who elected not to receive coverage, information on the coverage offered

It is also important to remember that none of the information on these two information returns is entered on the 2015 federal tax return. Therefore, it is not necessary for individuals to have received either of these two information forms in order to complete and file their 2015 federal tax return.

This is especially true for taxpayers who file in the early part of the filing season. Since they will not have received either the Form 1095-B or 1095-C, it is important to reiterate that the taxpayer may still file their 2015 federal tax return.

See the Questions and Answers about Health Care Information Forms for Individuals (Forms 1095-A, 1095-B, and 1095-C) on the IRS website for more information about the Forms 1095-B and 1095-C.

Affordable Care Act Related Forms
Below are the 2015 federal individual forms that are related to the Affordable Care Act:

• Form 1095-A (Health Insurance Marketplace Statement)
  This information return will be received by all individuals who purchased their health insurance from a Marketplace as follows:
  • Federal Marketplace – By end of this month (January). A copy will also be available via the individual’s account on healthcare.gov.
  • State Marketplace – No later than early February.
  
  
  The information included on Form 1095-A (Health Insurance Marketplace Statement) is needed to complete the Form 8962 for both the calculation of the Premium Tax Credit and to do the reconciliation of the credit with the Advance Premium Tax Credit (subsidy).
  See the Questions and Answers about Health Care Information Forms for Individuals (Forms 1095-A, 1095-B, and 1095-C) on the IRS website for more information on the Form 1095-A.

• Form 8962 (Premium Tax Credit)
  This form is completed by taxpayers who purchased their health insurance through a Marketplace and whose income is between 100% and 400% of the federal poverty line and are claiming a Premium Tax Credit.
  For individuals who received an Advance Premium Tax Credit (subsidy), this form must be completed in order to complete the reconciliation of the calculated Premium Tax Credit and the subsidy. If it is not included with the original return, the IRS will not complete the processing of the return until they receive a completed Form 8962, which will delay any refund shown on the return.
  The result of the calculation of the Premium Tax Credit and the reconciliation will be either a refundable credit or an additional tax.
  See the 2015 Form 8962 and the related instructions for more information.

• Form 8965 (Health Coverage Exemptions)
  Any individual who qualifies for an exemption from the requirement to have health insurance for all or part of 2015 will complete this form.
  For an explanation of what types of exemptions there are and how to apply for them, see the Exemptions section of the Affordable Care Act for Individuals page of the CrossLink Tax Resource Center.
  See the 2015 Form 8965 and the related instructions for additional information.

Additional Affordable Care Act Related Information Returns that Individuals May Receive for Health Care Coverage for 2015

Beginning in early 2016, individuals will begin to receive new Affordable Care Act (ACA) related information returns regarding their 2015 health insurance coverage. It is important to note that the following two information forms are for informational purposes only and are not needed to complete an individual’s 2015 federal tax return. The purpose of these forms is to inform individuals that they had health insurance for 2015, who was covered by their policy, and how many months they had coverage.

Form 1095-B (Health Coverage)
All health insurance issuers (insurance companies), self-insured employers, government agencies, and other entities that provided health insurance coverage to individuals during 2015 will be required to send each individual they covered a Form 1095-B (Health Coverage).

All individuals that had health insurance coverage during 2015 will receive a Form 1095-B in early 2016. If the individual had coverage from more than one health insurance provider during the year they will receive a Form 1095-B for each one.

The Form 1095-B will give the individual health insurance policy holder the following information:

• The name, address, and SSN of each person covered by the policy
• The number of months each person was covered during the year
• The name of the health insurance issuer
• Name of Employer (if it is employer sponsored coverage)

The Form 1095-B is proof that the taxpayer and his/her dependents were covered by health insurance for all or part of 2015.

None of the information that is on the Form 1095-B is entered on the 2015 federal tax return. Therefore, it is not necessary for an individual to have received a Form 1095-B in order to complete and file their 2015 federal tax return.

Form 1095-C (Employer Provided Health Insurance Offer and Coverage)
All individuals that worked for a company that was considered an applicable large employer (employed 50 or more full-time equivalent employees) and received or were offered health insurance coverage during 2015 will receive a Form 1095-C (Employer Provided Health Insurance Offer and Coverage) in early 2016 from their employer.

The Form 1095-C will inform the employee of the following:

• Name, address, and SSN of the employee
• Name and SSN of the employee’s dependents that were covered and for which months they were covered during 2015
• Name, address, and EIN of Employer
• For those who elected not to receive coverage, information on the coverage offered

The Form 1095-C is proof that the taxpayer and his/her dependents were covered by health insurance for all or part of 2015 by their employer.

None of the information that is on the Form 1095-C is entered on the 2015 federal tax return. Therefore, it is not necessary for an individual to have received a Form 1095-C in order to complete and file their 2015 federal tax return.

Supreme Court Upholds the Affordable Care Act Subsidies for Federal Marketplace

The Supreme Court ruled yesterday (June 25) in a 6-3 decision that health insurance subsidies are legal in the 34 states that are using the federal marketplace. Therefore, approximately 6 million people who reside in those states will continue to receive the subsidy for the remainder of 2015 and all future years.

This also means that there will be no changes to the way the Affordable Care Act is administered by the IRS and Health and Human Resources for 2015 and beyond.

For more detail see:

• Supreme Court’s opinion on the King vs. Burwell case
• News release US Department of Health and Human Services Secretary Sylvia M Burwell on the Supreme Court’s ruling
• White House Fact Sheet on the Supreme Court Upholding Critical Part of Affordable Care Act

Tax Update: New IRS Publication 974 (Premium Tax Credit)

The final Publication 974 (Premium Tax Credit) is now available on the IRS website on the Current Forms and Publications page. This new publication provides additional instructions and information for taxpayers who purchased health insurance from a Marketplace and had a situation that was not covered in the Form 8962 (Premium Tax Credit) or the Form 1040 instructions.

The publication covers the following:

• How to calculate the self-employed health insurance deduction for self-employed individuals who purchased health insurance through a Marketplace
• How to request penalty relief for taxpayers who must pay excess advance premium tax credit 
• Information on individuals who are not lawfully present in U.S. and are enrolled in a qualified health plan
• Taxpayers who are filing a tax return but who are not claiming any personal exemptions
• How to determine the applicable second lowest cost silver plan premium amount that is needed to calculate the premium tax credit
• Taxpayers who were married during the tax year and want to use the alternative calculation that may lower their taxes

IRS Update: Affordable Care Act and the 2014 Federal Return

As the beginning of the 2014 filing season is upon us, now is the time to emphasize the importance of the Form 1095-A for taxpayers that received an advance premium tax credit (subsidy) in 2014, as well as remind everyone of how the Affordable Care Act will affect all 2014 federal returns.

Importance of Form 1095-A (Health Insurance Marketplace Statement) for Individuals Who Received an Advance Premium Tax Credit (Subsidy)

For individuals who received an advance premium tax credit (subsidy) that reduced their monthly health insurance premiums, it is necessary to have the Form 1095-A in order to complete the Form 8962 (Premium Tax Credit) because it contains the information that is needed to both calculate the premium tax credit and complete the reconciliation of the subsidy with the calculated credit.

Since the filing season begins on January 20, 2015, and a large number of the individuals who received a subsidy will not receive their copy of the Form 1095-A until the first week of February, tax preparers should not complete and file a return of an individual who obtained their health insurance through a Marketplace until they have received a copy of the Form 1095-A – allowing them to complete and include Form 8962 with the return. Read More

All Individual Federal Returns Will Be Affected by the Affordable Care Act

Everyone who files a 2014 federal tax return will be affected in one of the following ways by the Affordable Care Act:

• Most individuals will only have to check the Full Year Coverage box on Form 1040 since they were covered by their employer, government program (such as Medicaid or Medicare), or private insurance purchased outside of Marketplace for all of 2014.
• Taxpayers who obtained their health insurance at the federal or a state marketplace will:
• Receive Form 1095-A (Health Insurance Marketplace Statement) from the federal or state Marketplace around January 31, 2015;
• Complete Form 8962 (Premium Tax Credit) to claim the Premium Tax Credit and, if they received an advance premium tax credit (subsidy), complete the required reconciliation.
• Read More

Click here to read the entire CrossLink Tax Update on how the Affordable Care Act affects 2014 Tax Returns.

IRS Update: Additional Tax (Penalty) for Not Having Health Insurance for 2014

The following is a reminder of how the individual shared responsibility payment (penalty or additional tax) for not having health insurance for all or part of the year will be calculated for 2014, as well as how much it increases in 2015. Read More

The individual shared responsibility payment (penalty) will not apply to an individual who qualifies for an exemption that they either obtained from the Marketplace or requested when filing their 2014 federal return.

It is important to remember that the penalty, as explained below, is based on the individual not having insurance for the entire year. If an individual did not have insurance for only part of the year, then the penalty would be pro-rated based on the number of months they did not have health insurance.

The individual shared responsibility payment for 2014 is the greater of:

• 1% of their modified adjusted gross income that exceeds their personal exemption (doubled for married couples filing jointly), plus the standard deduction for their filing status.

Modified Adjusted Gross Income is Adjusted Gross Income plus:

• Tax exempt interest
• Portion of social security income not included in income
• Foreign earned income and the housing cost of individuals who live abroad

Therefore, the penalty begins to be calculated once the modified adjusted gross income exceeds:

• $10,150 for single individuals
• $20,300 for married couples filing jointly

Or

• A flat dollar amount of $95 per adult family member age 18 and older and $47.50 for each dependent under age 18. This amount is capped at $285 for 2014.

One percent (1%) of income will begin to exceed the flat dollar amount when an individual’s Modified Adjusted Gross Income exceeds

• $19,650 for Single individuals
• $39,300 for Married couples with no dependents
• Read more

Put another way, Single individuals subject to a penalty will pay the flat dollar amount when their income is between $10,150 and $19,650. Once their income exceeds $19,650 they will pay 1% of their income.

Married couples subject to the penalty will pay the flat dollar amount when their income exceeds...Read more

Click here to read the entire CrossLink Tax Update that includes further information on the additional penalty for not having health insurance for 2014.

IRS Update: Individual’s 2014 Federal Return and the Affordable Care Act

As we get closer to the beginning of the 2015 filing season, it is important to understand how the Affordable Care Act will impact every individual who files a 2014 federal return. They may be impacted in a small way or major way depending on their health insurance status and where they obtained their health insurance during 2014.

Since the majority of taxpayers will be covered for the entire year by their employer, a government sponsored plan (such as Medicaid or Medicare), or from other qualifying health insurance, they will only need to check the Full Year Coverage Checkbox on Form 1040, line 61.

Taxpayers who purchased their health insurance at the Marketplace (State or Federal Exchange) will need to do the following:

• Taxpayer will receive by mail a Form 1095-A (Health Insurance Marketplace Statement) from the Marketplace. This information return should be received by the taxpayer by January 31, 2015 and will include details needed to complete the premium tax credit and do the reconciliation if they received an advance premium tax credit (subsidy) that helped pay their monthly health insurance premiums during 2014.
• Complete Form 8962 (Premium Tax Credit)
• Calculate the premium tax credit based on their 2014 income and family size.
• Enter the advance premium tax credit (subsidy) information from Form 1095-A, Part III, if applicable.
• Read more

Taxpayers who did not have health insurance for 2014 will do one of the following:

• Complete Form 8965 (Health Coverage Exemptions) to claim an exemption from the health care coverage requirement;

Or

• Have to pay shared responsibility payment (penalty) which will be calculated according to a worksheet in the Form 8965 instructions and entered on Form 1040, line 61.

Click here to read the entire CrossLink Tax Update that includes further information on individual's 2014 federal returns and the Affordable Care Act.

IRS Update: 2015 Employer Shared Responsibility Payment (Penalty) Under the Affordable Care Act

As a reminder, the employer shared responsibility (penalty) portion of the Affordable Care Act will be applied beginning on January 1, 2015. Therefore, all large employers (generally employed 100 or more full-time employees during 2014) are required to offer affordable health insurance to their employees that provides minimum essential coverage. Large employers who fail to do so will be subject to a shared responsibility payment (penalty). Read More

For 2015 there is transitional relief from the penalty for businesses that employed between 50 and 100 full-time equivalent employees during 2014. To be eligible, an employer must meet the following conditions:

• Did not reduce the size of its workforce or overall hours of service of its employees during the period starting on February 9, 2014 and ending on December 31, 2014.
• Did not eliminate or materially reduce the health coverage it offered as of February 9, 2014 during the period beginning on February 9, 2014 and ending on December 31, 2015.
• Read more

If the employer does not meet these conditions, then the definition of a large employer is 50 or more full-time employees during 2014.

Generally, a large employer will be subject to a shared responsibility payment (penalty) for 2015 once at least one full-time employee receives a premium tax credit and:

• Employer does not offer health insurance coverage to at least 70% of their employees – Penalty is calculated as $2,000 x (Total number of full-time employees minus 30) which is prorated for each month that they did not offer coverage;

Or

• Employer offers health insurance coverage that is not affordable or does not meet the minimum value standards – Penalty is $3,000 for each full-time employee who opts out of the employer’s coverage and obtains their health insurance through a Marketplace and is eligible for a premium tax credit.

Click here to read the entire CrossLink Tax Update that includes further information on the 2015 Employer Shared Responsibility Payment (Penalty) under the Affordable Care Act.

IRS Health Care Tax Tips and Reminder about the Premium Tax Credit for 2014 Returns

Even though most tax provisions of the Affordable Care Act do not begin to affect federal tax returns until next filing season, the provisions will have an impact on the decisions taxpayers make if they need to obtain their health insurance through an Exchange and they receive the advanced premium tax credit (subsidy) to help them pay for their premiums. Below you will find more IRS resources available to taxpayers that help explain the tax provisions and a reminder about the Premium Tax Credit.

New IRS Health Care Tips Page
The IRS has added a Health Care Tax Tips page to their website to help individuals understand how the Affordable Care Act may affect their taxes beginning with their 2014 federal return.

At the present time this site provides links to information on:

• Premium Tax Credit
• Why it is important for individuals who obtain health insurance through an Exchange and receive a subsidy to help pay for their insurance premiums to inform the Exchange of changes in their income or family size during 2014
• Overview of the penalty for not obtaining health insurance and who is exempt from the penalty provision
• Where to obtain more information on health insurance exchanges, other tax law provisions of the Affordable Care Act, and individuals’ health care choices

The IRS will be adding to this site throughout 2014 so be sure to check it periodically to see what new information the IRS has posted.

Premium Tax Credit
Even though the calculation of the premium tax credit will not take place until next year, it is essential to become familiar with this credit. Doing so will enable you to better explain to your clients who received a subsidy how it will affect them when they file their 2014 federal return next filing season.

Below is a brief overview on the premium tax credit:

Every taxpayer who received an advanced premium tax credit to help pay for their health insurance will have to complete the 2014 Premium Tax Credit form when filing their 2014 federal return. The calculated amount of the 2014 premium tax credit will then be compared to the subsidy amount they received which will result in one of the following:

• The taxpayer will receive a refundable credit if the premium tax credit is more than the subsidy amount.
• The taxpayer will have to pay an additional tax if the subsidy amount is higher than the premium tax credit. The amount of additional tax will be limited based on where the taxpayer falls on the federal poverty line. It will range from a minimum of $300 ($600 for married filing joint) to a maximum of $1,125 ($2,500 for married filing joint).

It is important to understand that a taxpayer who receives a subsidy to help pay for their health insurance premiums is required to file a 2014 federal return and complete the premium tax credit form. This is true even if they otherwise would not be required to file a federal return. If they do not complete the premium tax credit form, they will not be able to receive a subsidy in future years.

For a more detailed explanation of the Premium Tax Credit, see the How the Affordable Care Act will Affect You and Your Tax Return - Premium Tax Credit page on the CrossLink Tax website.

Also, here are other Premium Tax Credit resources available on the IRS website:

• IRS Premium Tax Credit
• IRS Questions and Answers for the Premium Tax Credit

Health Insurance Sign-up Date to Avoid Penalty Extended

The last day to sign up for health insurance and avoid an additional tax penalty has been extended to coincide with the open enrollment end date of March 31, 2014.  This was announced by the Obama administration on October 28, 2013.

Before this change, a person had to enroll by February 15, 2014 in order to ensure that their insurance went into effect before March 31, 2014 and avoid the possibility of being subject to a penalty for not having insurance for at least nine months out of the year under the Affordable Care Act.

Individual Requirement to Have Insurance and State Insurance Exchanges

As we near the open enrollment period for the individual insurance requirement, now is the time to become more familiar with what people without health insurance will need to do when October 1, 2013 arrives. Below are the highlights of what the Affordable Care Act requirements are for obtaining health insurance, how the enrollment process on a State Exchange will operate, and how the premium assistance subsidy will work.

Individual Requirement to Obtain Health Insurance

Everyone will be required to have health insurance that meets a minimum level of benefits beginning on January 1, 2014.

If a person does not obtain health insurance for 2014, they will be required to pay an additional tax when they file their 2014 Federal income tax return. The additional tax for 2014 will be calculated as the greater of:

• 1% of their income that exceeds their filing threshold based on their filing status; or
• $95 for the taxpayer and if applicable, the spouse and dependents not to exceed $285 for 2014. The additional tax for dependents under age 18 is $47.50 for 2014.

For a complete explanation of how the additional tax will be calculated, see the Individual Penalty for Not Having Health Insurance page on the CrossLink website.

State Exchanges and Premium Assistance Subsidy

People who do not have health insurance will be able to obtain it at the State Exchange located in their State of residence. The State Exchange will also determine the potential amount of premium assistance subsidy that individuals qualify for.

The subsidy is designed to help people pay for their 2014 health insurance premiums. It is essentially a pre-payment of the premium tax credit that will be calculated when they file their 2014 Federal income tax return.

Here is how the State Exchange will work:

• Most people will sign up with the exchange via the internet by creating an account and filling out an online application on their State Exchange's website.
• The Exchange will use the information from the application and their income from their 2012 Federal return to first determine if they are eligible for coverage under a government health insurance program such as Medicaid.
• If not eligible for a government program, the exchange will determine what their subsidy is.
• Finally, the person applying may select an insurance plan that is offered by their State Exchange.

For more information on State Exchanges, see the following pages on the Federal government's Healthcare.gov website:

• Welcome to the Marketplace
• Health Insurance Marketplace

Health Insurance Premium Subsidy
The Health Insurance Premium Subsidy is also known as the Advance Premium Tax Credit.

A person is eligible for a subsidy (advance premium tax credit) to help pay for their 2014 health insurance premiums if they obtain their insurance at a State Exchange and their income is between 100% and 400% of the Federal Poverty Line.

It is important to remind people that the subsidy does not pay for the entire premium and the subsidy is paid directly to the insurance company. Individuals must pay a minimum amount of the premium based on where they fall on the Federal Poverty Line.

The minimum amount a person must pay is calculated as a percentage of their income and it ranges from 2%, if they fall between 100% and 133% of the Federal Poverty Line, up to 9.5%, if they fall between 300% and 400% of the Federal Poverty Line.

For a more detailed explanation of how the subsidy is determined, see the Premium Assistance Subsidy page on the CrossLink website.

2013 Federal Tax Changes to Be Aware Of

Itemized Medical Expense Deduction Threshold Percentage Change
As part of the Affordable Care Act, the threshold percentage for when medical expenses are included as an itemized deduction on Schedule A was changed to:

• Taxpayers under 65: 10%
• Taxpayers 65 and older: 7.5%

Basic Changes
Business Mileage Rate for 2013: 56.5 cents per mile

Bonus Depreciation: 50% rate still applies

Capital Gains/Dividends Tax Rate:

• 0% for taxpayers in 10% or 15% tax brackets
• 15% for taxpayers in 25%, 28%, 33%, or 35% tax brackets
• New 20% rate for taxpayers in new 39.6% tax bracket

Standard Deduction

• Single: $6,100
• Married Filing Jointly: $12,200

For a complete listing of the basic yearly changes for 2013, see the Things to Know for Current Tax Year section of the Tax Resource Center on the CrossLink website.

New Provisions Affecting Higher Income Individuals
Individual Income Tax Rates

• Added new 39.6% rate when the AGI reaches:
• $400,000 - Single
• $450,000 - Married Filing Joint
• $425,000 - Head of Household
• $225,000 - Married Filing Separate
• The 10%, 15%, 25%, 28%, 33%, and 35% brackets were made permanent

Phase-Out of Itemized Deductions and Personal Exemptions
Beginning in 2013, the taxpayer's itemized deductions and personal exemptions will begin to be reduced when their adjusted gross income (AGI) reaches the following threshold amounts:

• $250,000 - Single
• $300,00 - Married Filing Jointly
• $275,000 - Head of Household
• $150,000 - Married Filing Separately

The reduction in Itemized Deductions will be calculated as the lesser of:

• 3% of the amount over the taxpayer's threshold amount; or
• 80% of the total itemized deductions

Personal exemptions will be reduced by 2% for each $2,500 (or fraction thereof) by which the taxpayer's AGI exceeds the applicable threshold amount.

For a complete listing of what Federal provisions have changed or what extender provisions are still in effect for 2013, see the Things to Know for Current Tax Year section of the Tax Resource Center on the CrossLink website.

Affordable Care Act Update - Employer Reporting and Penalty Provisions Delayed for One Year

The employer penalty and reporting provisions under the Affordable Care Act have been postponed for one year until 2015. The Administration explained that this delay was necessary in order to simplify the reporting requirements and to give employers more time to adapt their reporting systems and become familiar with the affordability and minimum value standards for the health insurance plans they offer their employees.

This means that for 2014, employers with 50 or more full-time employees will not be subject to a penalty if they do not offer health insurance to their employees, or if they do offer insurance and they fail to meet the affordability and minimum value standards.

Also for 2014, the employer reporting requirements relating to the health insurance an employer offers their employees will be voluntary. The employer reporting requirements will be required beginning in 2015.

It is important to note that this postponement of the employer penalty and reporting provisions does not affect the requirement that all individuals must obtain health insurance for themselves and their family beginning in 2014.

For more information, see the following:

• IRS Notice 2013-45 - Transition Relief for 2014 Under Sec 6055 and 6056 (Information Reporting) and Sec 4980H (Employer Shared Responsibility Provisions)
• July 2nd U.S. Department of Treasury Notes (Continuing to Implement ACA in a Careful, Thoughtful Manner)
• January 2nd White House Blog (We're Listening to Businesses About the Health Care Law)

IRS Update: Affordable Care Act: Employer Minimum Value Standard for Employer Health Insurance Plans

One of the requirements of the Affordable Care Act for a health insurance plan an employer offers their employees is that it meets the minimum value standard. If an employer plan fails to meet the minimum value standard, a large employer (50 or more full time employees) will be assessed a penalty.

The minimum value standard is met if the employer's plan pays 60% or more of the plan's share of the total allowed costs of the benefits provided under the plan.

Minimum value is calculated by dividing the anticipated covered medical spending of essential health benefits (EHB) coverage (for the population covered by a typical self-insured group health plan) by the total anticipated allowed charges for EHB coverage for a typical self-insured group health plan population. Read More

Click here to read the entire CrossLink Tax Update about the Employer Minimum Value Standard for Employer Health Insurance Plans.

Note: Modernized e-File (MeF) Scheduled Downtime - June 2013

This is a reminder that due to the current budget situation, the IRS plans to be closed on June 14, July 5, July 22 and August 30. The MeF system (Production and ATS) will not be available from 10:00 pm ET of the prior day until 9:00 am ET of the following day on these dates. For example, when the closure falls on a Friday, the system will be unavailable from 10:00 pm ET on Thursday until 9:00 am ET on Saturday.

MeF Production & ATS Downtime:
Shutdown is scheduled to begin on Thursday, June 13, 2013 at 10:00 pm ET and end at 9:00 am ET on Saturday, June 15, 2013.