- news
- TAX
Government funding bill postpones some health care taxes
Please note: This item is from our archives and was published in 2018. It is provided for historical reference. The content may be out of date and links may no longer function.
Related
Treasury posts preliminary list of jobs eligible for no tax on tips
Taxpayer’s circumstances do not warrant equitable tolling
When does debt become worthless?
TOPICS
In addition to keeping the federal government funded through Feb. 8, the continuing resolution (CR) bill, H.R. 195, which was signed by President Donald Trump on Monday night, contains three tax-related provisions. H.R. 195 further postponed the so-called Cadillac tax and the medical device tax and suspended the tax on health insurance companies for one year. All of these taxes were originally enacted as part of the Patient Protection and Affordable Care Act (PPACA), P.L. 111-148.
The Sec. 4980I 40% excise tax on certain high-cost employer health plans, popularly called the Cadillac tax, had already been delayed to 2020 by the Consolidated Appropriations Act, 2016, P.L. 114-113. The funding bill extends the moratorium for two more years until 2022 (H.R. 195 §4002, amending PPACA §9001(c)).
The medical device excise tax in Sec. 4191 was also enacted as part of PPACA. It was originally suspended for sales in 2016 and 2017 by the Consolidated Appropriations Act, 2016. That suspension expired Dec. 31, 2017. The continuing resolution extends the suspension through Dec. 31, 2019, with an effective date of Dec. 31, 2017 (H.R. 195 §4001, amending Sec. 4191(c)).
Finally, the health insurance tax, an annual fee on health insurance providers contained in Section 9010 of PPACA will be suspended for one year only, for 2019. That means the tax is in effect this year and, if no other legislation is enacted changing the effective date, will be in effect again in 2020 (H.R. 195 §4003, amending PPACA §9010).
The Congressional Budget Office estimates that the suspension and postponement of these taxes will lower federal revenues by $33.2 billion over 10 years.
— Sally P. Schreiber (Sally.Schreiber@aicpa-cima.com) is a JofA senior editor.