There are many important tax changes taking effect in 2015. They are the result of the Tax Increase Prevention Act of 2014 (TIPA) as well as other tax legislation, or are triggered by effective dates in regs, rulings and other guidance. Numerous other tax changes will go into effect by default because a long list of business and individual tax breaks (the so-called “extender provisions”), which were extended for a year only by TIPA, expire at the end of 2014.
One additional tax law change now affecting many businesses is the Affordable Care Act (Obamacare) employer shared responsibility payment. In general, beginning Jan. 1, 2015, employers with at least 100 full-time and full-time equivalent employees must offer affordable health coverage that provides minimum value to their full-time employees and their dependents, or they will be subject to an employer shared responsibility payment. Under the employer shared responsibility rules, if a covered employer does not offer affordable health coverage that provides a minimum level of coverage to their full-time employees (and their dependents), it may be subject to an employer shared responsibility payment if at least one of its full-time employees receives a premium tax credit for purchasing individual coverage on one of the new Affordable Insurance Exchanges, also called Health Insurance Marketplaces.
Employers that are subject to the employer responsibility provisions in 2015 must offer coverage to at least 70% of full-time employees as one of the conditions for avoiding an assessable payment; that percentage will increase to 95% in 2016.
The employer responsibility provisions will not apply until 2016 to employers with at least 50 but fewer than 100 full-time employees if the employer provides an appropriate certification described in regs.
If you have questions about this, or any other tax law change, please contact Randy Smith, Shareholder.