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New IRS ACA guidance on individual mandate, hardship exemption, premium tax credit

Notice 2014-76, 2014-50 IRB; Rev Proc 2014-62, 2014-50 IRB; T.D. 9705, 11/21/2014; Reg. § 1.5000A-2, Reg. § 1.5000A-3, Reg. § 1.5000A-4

IRS has released a new Notice, Revenue Procedure, and final regs pertaining to various aspects of the Affordable Care Act (ACA).

The final regs relate to the individual mandate and provide taxpayers with guidance under Code Sec. 5000A on the requirement to maintain minimum essential coverage and the rules governing certain types of exemptions from that requirement.

Notice 2014-76 provides a list of the hardship exemptions under Code Sec. 5000A that taxpayers may claim on a Federal income tax return without obtaining a hardship exemption certification from the Marketplace.

Rev Proc 2014-62 announces the indexed applicable percentage table in Code Sec. 36B(b)(3)(A), which is used to calculate an individual’s premium tax credit for tax years beginning after calendar year 2015. It also: (a) announces the indexed required contribution percentage in Code Sec. 36B(c)(2)(C)(i)(II) used to determine whether an individual is eligible for affordable employer-sponsored minimum essential coverage for purposes of the premium tax credit for plan years beginning after calendar year 2015; and (b) cross-references the required contribution percentage, as determined under guidance issued by the Department of Health and Human Services, used to determine whether an individual is eligible for an exemption from the individual shared responsibility payment because of a lack of affordable minimum essential coverage under Code Sec. 5000A(e)(1)(A) for plan years beginning after calendar year 2015.

This new guidance will be covered in greater detail in a forthcoming article.

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