Affordable Care Act Provides Expanded Tax Benefit to Health Professionals Working in Underserved Areas

Here is some good news for health care professionals who received student loan relief under certain state programs that reward those who work in under-served communities. If this is you, the IRS has announced you may now qualify to receive a special tax break.

The Affordable Care Act went into effect last year (2009); it expands the tax exclusion received by health professionals under loan repayment and forgiveness programs. Prior to this new law, only amounts received under the National Health Service Corps Loan Repayment Program or certain state loan repayment programs eligible under the Public Health Service Act qualified for a tax exclusion.

Basically, the Affordable Care Act expands the prior tax exclusion to include any state loan repayment or loan forgiveness programs that were created to increase the availability of health care services in under-served areas or in “health professional shortage areas” and the Act makes this exclusion retroactive to the 2009 tax year.

If you are a health care professional serving in one of these areas or participating in these programs and have reported income from repaid or forgiven loan amounts on their 2009 returns (possibly after receiving a Form W-2, Wage and Tax Statement, or Form 1099a) you may be due a refund.

Here’s some additional information released by the IRS:

• Those who believe they qualify for this relief may want to consult their state loan program offices to determine whether the program is covered by the new law.
• Health care professionals who have not yet filed for 2009 need not report eligible loan repayment or forgiveness amounts when they file. Those who have already filed may exclude eligible amounts by filing Form 1040X, Amended U.S. Individual Income Tax Return. This form can be downloaded from this website. Individuals filing Form 1040X to claim this exclusion should write “Excluded student loan amount under 2010 Health Care Act” in the Explanation of Changes box.
• Health care professionals may request an employer or other issuer to provide a Form W-2c, Corrected Wage and Tax Statement, or 1099 and may attach the corrected form to the Form 1040X. However, the Amended Tax Return Form 1040X may also be filed without attaching a corrected W-2 form.

IRS Offers Details on New Small Business Health Care Tax Credit

Back in April 2010, the IRS stated they sent post cards to millions of small businesses to alert them to the new Health Care Tax Credit. Even if you didn’t receive a post card, your small business may still be eligible. Also, if a small business is receiving state health care tax credits they may also qualify for full federal tax credit.

Paying for your employers to have health insurance, when you are a small business, can be a financial strain. The Health Care Tax Credit, part of the Affordable Care Act was designed to encourage small employers to offer health care insurance for the first time or to maintain coverage they already have. This new tax credit aims to ease the financial burden for small businesses while helping to get their employees properly insured or help them stay insured.

To provide new guidelines to help small businesses determine whether they are eligible for the new health care tax credit, the IRS issued a new form, Notice 2010-44. There is also a 3 step form that might be easier to use, to determine your small business’ eligibility. You can find that form here.

The credit is available to small businesses that pay at least half the cost of single coverage for their employees in 2010. For tax years 2010-2013, the maximum credit is 35 percent of premiums paid by eligible small businesses and 25 percent of premiums paid by eligible tax exempt organizations.

If you are a small business employing 10 or fewer full-time employees you will get the maximum credit. Keep the following information in mind:

Eligibility Rules

• Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
• Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
• Average annual wage. A qualifying employer must pay average annual wages below $50,000.
• Both taxable (for profit) and tax-exempt firms qualify.

Amount of Credit

• Maximum Amount. The credit is worth up to 35 percent of a small business' premium costs in 2010. On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
• Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.

If you are still unsure as to whether your business qualifies for any of these tax credits please contact a tax professional who can determine your eligibility for you. Don’t miss out on this important credit!

Tips to Find Affordable Health Care

It is no secret that millions of Americans go with out health insurance because of high cost, and with the ongoing unemployment problems many families simple cannot afford coverage. Fortunately, MSN Money.com put together this helpful article with tips on how to find affordable health care. You can find a few of their tips below, but be sure to check out the full article at MSN Money.com.

If you're uninsured and seeking stopgap medical care before you find coverage again, you can triage your way to better health by understanding the trade-offs of several care options, experts say. A retail clinic, urgent care facility or community health center may be a suitable fit, depending on the severity of your medical need and your personal preferences.

A broad spectrum of care is available, from the limited offerings of a retail clinic to the high-end capacity of an emergency department, said Ateev Mehrotra, a policy analyst at Rand and a professor at the University of Pittsburgh School of Medicine.

"They're all places you don't need an appointment, there's open extended hours, and they're there to treat people who can't get in to see their regular provider," Mehrotra said.

If you have a regular doctor you'd like to keep seeing but fear you can't pay full price because of lost coverage, give the doctor a chance to work out a charity care arrangement, payment plan or possible treatment changes to lower costs, said Dr. Lori Heim, the president of the American Academy of Family Physicians, who practices in Laurinburg, N.C.

Most doctors will try to work with patients to ensure their continuity of care, she said. "Physicians also value that personal relationship that develops."