Overview
This fall, the Supreme Court will hear arguments in California v. Texas, which challenges the constitutionality of the Patient Protection and Affordable Care Act. The Affordable Care Act introduced the 3.8% tax on net investment income and the 0.9% increase in Medicare Tax on wages.
It is possible that if the Affordable Care Act is held to be unconstitutional these income taxes may be repealed. The likelihood of repeal is uncertain and, even if repealed, it is not certain that a refund for prior years would be available. However, if repealed and a refund is made available, it may be in your best interest to preserve a potential claim to a refund of these taxes for tax years 2016, 2017, and 2018. In order to preserve a claim with respect to taxes paid for the tax year 2016, you may be required to file a Protective Refund Claim with the IRS on or before this Wednesday, July 15, 2020, depending on when you filed your 2016 return, so as not to be barred by the statute of limitations.
If this is applicable to you, we urge you to contact your accountant immediately to assist you with any protective claim filings.
