The Billups Company CPA's, Inc.

The Patient Protection and Affordable Care Act passed the house on Sunday, March 21 and was signed into law today by President Obama. There are quite a lot of tax provisions in this bill and more to come in the companion ”Reconciliation Act of 2010” which was passed and sent to the Senate for consideration. Because of the size and scope of the bill we plan to do a series of articles on the various aspects of this legislation. We start with some simple provisions.

New Tax on Indoor Tanning

Perhaps nothing in the bill illustrates Washington’s pervasive, mother-knows-best mentality, than this odd provision which imposes a new 10% sales tax on amounts paid for indoor tanning services.  This tax applies to tanning services purchased after July 1, 2010.

Information Reporting

Employer W-2 Reporting. After 2010, employers will be required to report the value of employee health coverage they provide on each employee’s W-2.

Form 1099 Reporting. After 2011, businesses will have to provide Form 1099’s to all payees to whom they make aggregate payments of $600 or more in a calendar year. This will include corporate payees for the first time. It is unclear, based on what I could find, whether the legislation expands the scope of the types of payments that must be reported.

Disclosure of Return Information

The legislation authorizes the IRS to release tax return information to the Department of Health and Human Services to determine eligibility for credits, cost sharing reductions, or eligibility in state health subsidy programs. The IRS may also release tax return information to the Social Security Department to expedite adjustments to Medicare Part D.

This is the first installment and there is a lot more to come. If the health care legislation does nothing else, it will keep accountants and lawyer employed.