Repeal of Certain 1099 Tax Reporting Provisions
On April 14, 2011, President Barack Obama signed Public Law 112-9, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (the 1099 Taxpayer Protection Act), which repeals certain 1099 tax reporting provisions in Internal Revenue Code Section 6041, as amended by the Affordable Care Act (ACA).
Specifically, this legislation:
The bill also changes the rules regarding the recapture of overpayments of premium tax credits provided under national health care reform. Beginning in 2014 households with income of less than 400% of the federal poverty level (FPL) will be eligible for a tax credit for health insurance coverage and may benefit from advanced premium payments made on their behalf for the purchase of health insurance. In the event these advanced payments exceed the amount of the tax credit for which the household is eligible, the extra payment is subject to recapture by applying taxes to the household. Although the ACA limited the amount of this recapture to $400 ($250 for unmarried individuals), the 1099 Taxpayer Protection Act will recapture a greater amount, based on the level of family income in the following table (the recapture amount for unmarried individuals will be 50% of the amount shown):
|Household Income||Recapture Limit|
|Less than 200% FPL||$600|
|At least 200% but less than 300% FPL||$1,500|
|At least 300% but less than 400% FPL||$2,500|
For more information on this topic, please see the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011, or visit the IRS website.
This information is provided for informational purposes only and does not constitute legal advice. Please consult your legal counsel regarding your specific situation.
Please note that this content is only intended to describe national health care reform requirements under the Patient Protection and Affordable Care Act (PPACA). It does not address Massachusetts law requirements or the potential impact of Massachusetts law on federal PPACA requirements.
For purposes of PPACA implementation, Blue Cross Blue Shield of Massachusetts assumes the plan year is the policy year, unless an account notifies us otherwise.