Friday, November 13, 2009

Affordable Health Care for America Act

As we wait for Senate action on their version of this controversial legislation, and try to digest the pundits’ opposing views on the subject, it’s probably a good time to take a brief look at a few of the more broadly-applicable tax provisions (as well as a few of the non-tax ones) and see what this proposed legislation really says.

If you’re looking for the full 1990-page proposed law and corresponding Congressional actions, you can access it through the Library of Congress website at the following URL:

(Full disclosure: Much of the following was taken from the JCT's technical explanation of the House bill. The original JCT document is available here.)

So without further ado, here is a quick synopsis on the House version of the bill:

I. Directly Tax-Related

A. Tax on Individuals Without Acceptable Health Care Coverage – Would generally impose a tax on such individuals equal to the lesser of (a) the national average premium for coverage for the taxable year, as determined by the Secretary of Treasury in coordination with the Health Choices Commissioner, or (b) 2.5% of the excess of the taxpayer’s modified adjusted gross income for the taxable year over the threshold amount of income required for income tax return filing for that taxpayer. This tax would be in addition to both the regular income tax and the alternative minimum tax and would only apply to US citizens and resident aliens, except if it would give rise to a hardship for the affected person(s). This provision would be effective for taxable years beginning after December 31, 2012.

Wednesday, November 11, 2009

Introduction / Worker, Homeownership, and Business Assistance Act of 2009

Before I launch into my first blog entry, allow me to introduce myself and offer a confession: My name is Andrew Gantman, I'm a tax partner at SingerLewak LLP, and I *love* the field of taxation.

While admittedly "geeky," there's something really gratifying about finding an obscure gem in a case, legislative history, or unusual set of facts that allows a client an unexpected benefit. Or working with an IRS examiner to demonstrate why a client is correctly reporting a particular item in a later tax year.

On that note, let's get started!

While everyone's been obsessing over the 1990-page Health Care bill that just passed the House of Representatives (but faces an uncertain future in the Senate), President Obama on November 6 signed the Worker, Homeownership, and Business Assistance Act of 2009 into law.

A few of the more widely (and currently) applicable provisions are as follows:


Extension (Effective for purchases after November 30, 2009)

Extends the credit available to first-time home buyers providing a refundable federal income tax credit equal to the lesser of $8,000 ($4,000 for a married individual filing separately) or 10% of the purchase price of a qualifying principal residence on or after April 9, 2008, and before December 1, 2009. The credit phases out for individual taxpayers with modified adjusted gross income between $75,000 and $95,000 ($150,000 and $170,000 for joint filers) for the year of purchase, and also contains certain recapture provisions upon later disposition of the residence.

The new law generally extends this credit to apply to a principal residence purchased before May 1, 2010. The credit also applies to the purchase of a principal residence before July 1, 2010 by any taxpayer who enters into a written binding contract before May 1, 2010, to close on the purchase of a principal residence before July 1, 2010.