Affordable Care Act Related Taxes

October 15th Extension Deadline

If you file your taxes on extension with an October 15 deadline, and you pay significant Affordable Care Act (“ACA”)-related taxes, you should discuss with your accountant filing a Protective Refund Claim for ACA-related taxes.

In the next few months, the Supreme Court will hear a case to determine the constitutionality of the ACA, including the 3.8% investment surtax and the 0.9% Medicare surtax.  If these taxes are ruled unconstitutional, in full or in part, it creates an opportunity to file a Protective Refund Claim for ACA-related taxes with the Internal Revenue Service (“IRS”).  This claim acts as a proactive refund request for tax previously paid, while the matter is pending.  If the ACA is found unconstitutional, the claim would be processed by the IRS, resulting in a refund of ACA-related taxes paid.

What does this mean?

The statute of limitations deadline for the claim is 3 years from the filing date of your return.  If your taxes are filed on extension, the deadline for 2016 would be October 15 of this year.  Subsequent years will be addressed depending upon developments in the case.

 We recommend that our clients who file on extension in October and are subject to significant ACA-related taxes discuss making the appropriate filings with their accountants.  If you have any further questions on this issue, please email us at tax@goqbo.com