Excise taxes on ‘Cadillac’ health plans and medical devices again delayed
The Federal Register Printing Savings Act of 2017, P.L. 115-120, enacted Jan. 22, which temporarily funded federal government operations, also extended or renewed suspensions of three excise taxes or fees under the Patient Protection and Affordable Care Act (PPACA), P.L. 111-148. The 40% excise tax on high-cost ("Cadillac") employer-sponsored health coverage under Sec. 4980I was delayed another two years. It is now effective for tax years beginning after Dec. 31, 2021 (originally effective after 2017 but previously delayed until after 2019). Similarly, the medical device tax under Sec. 4191, effective for sales after Dec. 31, 2012, but suspended for 2016 and 2017, is suspended another two years until after Dec. 31, 2019. The government funding act also suspended for 2019 the annual fee on covered health insurance providers under Section 9100 of PPACA. It was effective for calendar years 2013 (with 2014 as the first "fee year") through 2016, was suspended for 2017, and again became effective for 2018.
AICPA recommends TCJA fixes
In a Feb. 22 letter to leaders of congressional tax-writing committees, the AICPA recommended several technical corrections to P.L. 115-97, known as the Tax Cuts and Jobs Act (TCJA). At the head of the list was the treatment of net operating losses (NOLs). TCJA Section 13302(e)(2) provides that the changes to NOL carryforwards and carrybacks are effective for tax years ending after Dec. 31, 2017. The letter points out that the current language prevents fiscal-year filers from carrying back a loss from a full fiscal 2017 tax year, while calendar-year filers can carry back a loss from a full 2017 calendar tax year. It recommends changing the statutory language to make the provision effective for "taxable years beginning after December 31, 2017" (see also "Tax Practice Corner: Carry Your Losses (Further) Forward," on page 62).
Other proposed technical corrections include:
- Including qualified improvement property as property with a 15-year class life under Sec. 168(e)(3)(E), thus eligible for 100% bonus depreciation;
- Revising language in Sec. 170(b)(1)(G)(iii) to clarify that the TCJA's higher adjusted-gross-income limitation on charitable contribution deductions made in cash applies when taxpayers also make noncash contributions; and
- Increasing the alternative minimum tax exemption and phaseout amounts for trusts and estates similarly to the TCJA's increase for individuals.