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Monthly Archives: June, 2017

  • Understanding the Additional Medicare Tax

    Employers Must Withhold Tax for High Earners

    The Affordable Care Act’s Additional Medicare Tax applies to an individual’s wages that exceed a threshold amount based on his or her filing status ($250,000 for married taxpayers who file jointly, $125,000 for married taxpayers who file separately and $200,000 for all other taxpayers). The following are five important things employers need to know about the Additional Medicare Tax:

    1. Employers are required to withhold Additional Medicare Tax (at a rate of 0.9%) on wages or compensation paid to an employee in excess of $200,000 in a calendar year.
    2. An employer has this withholding obligation even though an employee may not be liable for Additional Medicare Tax because, for example, the employee’s wages do not exceed the applicable threshold for his or her filing status. Any withheld Additional Medicare Tax will be credited against the total tax liability shown on the individual’s income tax return.
    3. Employers are not required to notify an employee when they begin withholding Additional Medicare Tax.
    4. There is no employer match for Additional Medicare Tax.
    5. An employer that does not deduct and withhold Additional Medicare Tax as required is liable for the tax unless the tax that it failed to withhold from the employee’s wages is paid by the employee.

    Click here for more information from the IRS.

     


    Health Care Reform Updates provided by:

    Team Nash
    2005 E 2700 St, Suite 140, Salt Lake City, UT, 84109
    385-234-6754

    Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

    The information provided herein is intended solely for the use of our clients and members. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included herein, without the express permission of the Publisher. Kindly read our Terms of Use and respect our Copyright.

    © 2017 HR 360, Inc. – All rights reserved

    Read more
  • Medicare-Eligible Employees Ineligible to Receive Premium Tax Credits

    Under the Affordable Care Act (ACA), Medicare-eligible individuals are ineligible to receive premium tax credits. As a result, employers with Medicare-eligible employees should consider how those employees may impact their potential liability under the ACA’s employer shared responsibility provisions (also known as “pay or play”).

    Medicare-Eligible Employees and ‘Pay or Play’
    As highlighted in an IRS memorandum, because Medicare-eligible individuals are ineligible to receive premium tax credits, applicable large employers (ALEs) that offer coverage to at least 95% of their full-time employees and their dependents will not owe a pay or play penalty for any Medicare-eligible individual. For ALEs that do not offer coverage to at least 95% of their full-time employees and their dependents, however, Medicare-eligible full-time employees could potentially trigger (or increase) the penalty owed.

    Background
    For 2017, ALEs–generally those with at least 50 full-time employees, including full-time equivalent employees (FTEs), in the preceding calendar year–will be liable for a pay or play penalty only if:

    • The ALE does not offer minimum essential coverage to at least 95% of its full-time employees and their dependents, and at least one full-time employee receives a premium tax credit. Under this scenario, the annual penalty amount is $2,260 per full-time employee, minus up to 30 full-time employees.
    • The ALE offers minimum essential coverage to at least 95% of its full-time employees and their dependents, but at least one full-time employee receives a premium tax credit (either because the employer did not offer coverage to that employee or because the coverage the employer offered to that employee was unaffordable to the employee or did not provide minimum value). Under this scenario, the annual penalty amount is $3,390 per full-time employee that receives a premium tax credit.

    Health Care Reform Updates provided by:

    Team Nash
    2005 E 2700 St, Suite 140, Salt Lake City, UT, 84109
    385-234-6754

    Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

    The information provided herein is intended solely for the use of our clients and members. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included herein, without the express permission of the Publisher. Kindly read our Terms of Use and respect our Copyright.

    © 2017 HR 360, Inc. – All rights reserved

    Read more
  • ‘Pay or Play’ Guidance for Companies Under Common Ownership

    Related Companies Generally Combined for Determining ALE Status

    Applicable large employers (ALEs)-generally those with at least 50 full-time employees, including full-time equivalent (FTE) employees-are subject to the “pay or play” provisions of the Affordable Care Act. If these employers do not offer affordable health insurance that provides a minimum level of coverage to their full-time employees, they may be subject to a penalty if at least one full-time employee receives a premium tax credit or cost-sharing reduction for purchasing coverage on an Exchange.

    According to the IRS, companies that have a common owner or are otherwise related generally are combined and treated as a single employer for purposes of determining ALE status. If the combined group meets the 50 full-time employee threshold, then each separate company in the group is subject to the “pay or play” provisions-even those companies that individually do not employ enough employees to meet the threshold.

    Note: There is an important distinction for employers to keep in mind regarding the aggregation rules described above. Although related employers generally are combined and treated as a single employer for purposes of determining ALE status, potential liability under the “pay or play” provisions is determined separately for each member of the ALE group.

    Our Pay or Play section provides step-by-step guidance, worksheets, and calculators that can help employers determine whether they will be subject to a penalty and how to calculate it.


    Health Care Reform Updates provided by:

    Team Nash
    2005 E 2700 St, Suite 140, Salt Lake City, UT, 84109
    385-234-6754

    Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

    The information provided herein is intended solely for the use of our clients and members. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included herein, without the express permission of the Publisher. Kindly read our Terms of Use and respect our Copyright.

    © 2017 HR 360, Inc. – All rights reserved

    Read more
  • Team Nash is proud to support Team Kolifit

    Team Nash is proud to support Team Kolifit for the 2017 Adventure Racing World Championships.

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