February 15, 2015 Deadline for the Affordable Care Act Approaching Quickly
This tax season will see the historic intersection of Americans’ existing obligations under the Internal Revenue Code and the Patient Protection and Affordable Care Act (ACA). Employers will also face new obligations for the first time under the ACA.
By now, most people know that the ACA requires the majority of Americans to maintain health insurance. Americans may not know, however, that this obligation will be enforced by the Internal Revenue Service (IRS).
For the first time, filers will be asked to report whether they were covered by a health plan when filing their 2014 income tax returns. Those who were not covered will be assessed a penalty of either $95.00 or 1% of their income, whichever is greater. Credits may be available for qualifying, low-income tax-payers.
The deadline to avoid a penalty next year is approaching quickly. Americans must register for a qualifying plan by February 15, 2015, or face increased penalties next tax season. For tax year 2015, the penalty increases to $325.00 or 2% of income, whichever is greater.
The ACA does not only affect individual tax-payers, however. Starting in 2015, employers subject to ACA have increased reporting obligations. For the first time, employers who do not provide a qualifying health plan in 2015 must also pay a fine.
The ACA is exceedingly complicated. Employers with questions or concerns should begin by reading Affordable Care Act Information for Employers. Anyone with questions regarding their obligations under the ACA can contact a member of Eastburn and Gray’s Employment and Discrimination practice group.
Author: Erin N. Kernan
