Daily Tax Update - December 22, 2015: IRS Releases Notice Regarding Health Coverage Tax Credit

IRS Releases Notice Regarding Health Coverage Tax Credit:  Today, the IRS released Notice 2016-02, which provides guidance regarding the health coverage tax credit (HCTC).  The HCTC under section 35 provides a credit for 72.5% of the amount paid by an eligible individual for qualified health coverage of the individual and qualifying family members for eligible coverage months.  Although the credit expired at the end of 2013, it was reinstated, modified, and extended both retroactively and prospectively through 2019 by the Trade Preferences Extension Act of 2015.  Today’s notice provides information on who may claim the HCTC, the amount of the HCTC, and the procedures to claim the HCTC for tax years 2014 and 2015.  The notice also provides rules concerning the interaction between the HCTC and the premium tax credit under section 36B, as enacted by the Affordable Care Act.  

Affordable Care Act Reporting Requirements - Part II:  Steptoe’s Tax Group will present part-two of a complimentary webinar on the Affordable Care Act’s IRS reporting requirements for employers and the top 10 likely filing errors and related penalties.  The webinar will be held on Thursday, January 14 at 12 p.m. ET.  For more information click here.  

DTU IN DEPTH:

Changes Affecting REITs in Tax Extenders Legislation:  The Protecting Americans from Tax Hikes Act of 2015, signed into law on December 18, in addition to making substantial changes to numerous expiring tax provisions, contains 16 provisions relating to tax rules for real estate investment trusts (REITs).  According to estimates from the Joint Committee on Taxation, the package of REIT provisions will cost approximately $1 billion over the next 10 years.  For more in-depth coverage, click here.