IRS Releases Additional ACA Revenue Procedures and Draft Forms

This article discusses Revenue Procedure 2014-37, which provides the table to be used to calculate the premium tax credit.

Revenue Procedures Overview

Revenue Procedure 2014-37 provides indexing adjustments for certain provisions of the Affordable Care Act, specifically the table to be used to calculate the Premium Tax Credit and the procedure used to calculate the required contribution percentage for taxable years after 2014.  Figures have been indexed for inflation.  The tables will not apply until the 2015 tax year.

Revenue Procedure 2014-46 provides the 2014 monthly national average premium for qualified health plans that have the bronze level of coverage.  This is used as part of the calculation for the shared responsibility payment (penalty tax for not having coverage).  In addition, an explanation of the methodology used to determine the monthly national average amount is detailed.

Monthly National Average Bronze Plan Premium for 2014

Monthly National Average Bronze Plan Premium. For purposes of § 5000A(c)(1)(B) and § 1.5000A-4, the monthly national average premium for qualified health plans that have a bronze level of coverage and are offered through Exchanges in 2014 is $204 per individual.

Maximum Monthly National Average Bronze Plan Premium. For purposes of § 5000A(c)(1)(B) and § 1.5000A-4, the monthly national average premium for qualified health plans that have a bronze level of coverage and are offered through Exchanges in 2014 is $1,020 for a shared responsibility family with five or more members.

An option on how to compute the Health Insurance Deduction under §162 for self-employed individuals and the Premium Tax Credit under §36B.

Revenue Procedure 2014-41 provides guidance that a taxpayer may use to compute the deduction under §162 of the IRC for health insurance costs for self-employed individuals and the premium tax credit allowed under §36B. Using the calculation in this procedure is optional, but taxpayers must use a method that is in compliance with the application of the law. The calculation is needed to resolve the interrelationship between §162(l) and the Premium Tax Credit under §36B.

This revenue procedure applies to a taxpayer who is allowed a deduction under § 162(l) for the taxable year for specified premiums, as defined in § 1.162(l)-1T(a)(2) and is intended to provide taxpayers with calculation methods that resolve the circular relationship between the § 162(l) deduction and the § 36B tax credit and that satisfy the requirements of applicable tax law.

There are two possible calculations that have numerous steps to complete. The procedure provides an iterative calculation and an alternative calculation taxpayers may use, in addition to examples provided in Section 7 of the procedure.

Draft Forms

Draft Forms used for various Affordable Care Act issues were also released. They include:

Draft Form 1040 (including Line 61’s Healthcare Individual Responsibility Tax) was also released.