Certain Affordable Care Act Taxes are Suspended

January 25, 2018 | Article

H.R. 195, the legislative document signed into law on January 22, now designated as P.L. 115-12, used to end the government shutdown and fund the government through February 8, carried with it some tax legislation. The legislation suspended certain Affordable Care Act (ACA) tax provisions, including the “Cadillac tax,” the medical device excise tax and the annual fee on health insurance providers. 

Cadillac Tax
The Cadillac tax, which is related to high-dollar health insurance plans, was scheduled to apply for tax years beginning after December 31, 2019, after previous legislation had suspended the tax. But the new legislation delays the earlier suspensions for another two years until tax years beginning after December 31, 2021.

Medical Device Excise Tax
The medical device excise tax, a tax on the sale of medical devices imposed on manufacturers, producers and importers, has once again been suspended and will now apply to medical device sales made after December 31, 2019. In addition, the suspension also made the law change retroactive back to January 1, 2018. This move eliminated any excise tax that would otherwise have been due for sales this year.

Annual Fee on Health Insurance Providers
The Annual Fee on Health Insurance Providers, which had previously been suspended through 2017, is now scheduled to be applied in tax years beginning after December 31, 2019.

Contact your Eide Bailly professional for additional information on these new suspensions or on any other area of taxation.

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