Tax Implications of the Health Care Act – Businesses

Small Business Accounting – The July 2012 Supreme Court ruling upholding what’s collectively referred to as the “Affordable Care Act” (ACA) or “Health Care Act” has resulted in a number of changes to the US tax code. As such there are a number of tax implications for individuals and businesses. With that in mind, let’s take a closer look at what it might mean for you.

Small Business Health Care Tax Credit 

Small businesses and tax-exempt organization that employ 25 or fewer workers with average incomes of $50,000 or less, and that pay at least half of the premiums for employee health insurance coverage are eligible for the Small Business Health Care Tax Credit. For tax years 2010 through 2013, the maximum credit is 35 percent for small business employers and 25 percent for small tax-exempt employers such as charities. An enhanced version of the credit will be effective beginning Jan. 1, 2014. In general, on Jan. 1, 2014, the rate will increase to 50 percent and 35 percent, respectively.

Additional Tax on Businesses Not Offering Minimum essential Coverage

Effective in 2014 an additional tax will be levied on businesses with 50 or more full-time equivalent (FTE) employees that do not offer minimum essential coverage. Employers with fewer than 50 FTE employees are exempt from the additional tax. 

Excise Tax on High Cost Employer-Sponsored Insurance 
Effective in 2018, a 40 percent excise tax indexed for inflation will be imposed on employers with insurance plans where the annual premium exceeds $10,200 (individual) or $27,500 (family). For retirees age 55 and older, the premium levels are higher, $11,850 for individuals and $30,950 for families.

Excise Tax on Medical Devices
Effective January 1, 2014, a 2.3 percent tax will be levied on manufacturers and importers on the sale of certain medical devices.

Indoor Tanning Services
A 10 percent excise tax on indoor tanning services went into effect on July 1, 2010. The tax doesn’t apply to phototherapy services performed by a licensed medical professional on his or her premises. There’s also an exception for certain physical fitness facilities that offer tanning as an incidental service to members without a separately identifiable fee. 

If you need assistance navigating the complexities of the new health care act, don’t hesitate to call us. We’re here to help.

ABA Tax Accounting

Amare Berhie, Tax Advisor


866-936-0430 Toll Free


Find out which of your moving expenses may be tax deductible

Income tax ServicesIf you’ve moved due to a change in your job location or you’ve started a new job, you may qualify to deduct your moving expenses if you meet three requirements:  

  • Your move is related to start of work
  • You meet the distance test
  • You meet the time test

Find out if you can deduct moving expenses; what moving expenses are deductible; what moving expenses are not deductible; how a reimbursement from your employer affects your moving expense deduction; and how and when to report moving expenses.


Moving is stressful enough. Save time and money by seeing if you qualify for a deduction. 

Different rules apply to members of the armed forces. If you are a retiree who was working abroad, or a survivor of a decedent who was working abroad, and you move to the United States, different rules also apply.

For complete information, refer to Publication 521, Moving Expenses or contact us today for no obligation fee consultation.

ABA Tax Accounting

Amare Berhie, Tax Advisor


866-936-0430 Toll Free

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