Monday, March 22, 2010

Timeline of Tax Provisions in the House Health Care Bill

As many of you have probably heard, yesterday the House of Representatives passed President Obama’s health care reform package in a 219 – 212 majority vote. It now heads to the Senate where it is widely expected to pass after the required 20 hours of debate time.

The complicated legislation includes dozens of tax provisions; some that will take effect immediately while others will not take effect until up to eight years from now. Listed below are all of the tax law changes included in the bill, organized by when they will go into effect courtesy of The Tax Foundation.

Retroactive provisions:

  • Exclusion for assistance provided to participants in State student loan repayment programs for certain health professionals (retroactive to January 1, 2009)
  • Qualifying therapeutic discovery project credit (retroactive to January 1, 2009) – provision expires at end of 2010
  • Modification of section 833 treatment of certain health organizations (retroactive to January 1, 2010)
  • Make the adoption credit refundable; increase qualifying expenses threshold, and extend the adoption credit through 2011 (retroactive to January 1, 2010)
  • Small Business Tax Credit for certain small businesses (those meeting certain criteria) providing health insurance to employees (retroactive to January 1, 2010). In 2013, restricted only to insurance purchased through an exchange and only available for two consecutive years
  • Exclusion of unprocessed fuels from the cellulosic biofuel producer credit (retroactive to January 1, 2010)

Provisions that will go into effect on the date bill is signed into law:

  • Additional requirements for section 501(c)(3) hospitals
  • Study and report of effect on veterans’ health care
  • Provide income exclusion for specified Indian tribe health benefits
  • Codify economic substance doctrine and impose penalties for underpayments
  • Provision specifying that subsidies or tax credits received through health care reform will not affect individual's qualifications for other federal programs
  • Tax Exemption for Certain Member-Run Health Insurance Issuers
  • Tax Exemption for Entities Established Pursuant to Transitional Reinsurance Program for Individual Market in Each State
  • Rules pertaining to how the IRS is involved in income-verification and individual status for the purposes of participation in the exchanges and subsidies received

Other provisions going into effect before the end of 2010

  • July 1, 2010: Impose 10% excise tax on indoor tanning services

Continue reading at Tax…

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