On Tax Issues

The Internal Revenue Service has issued technical guidance on three tax issues:

Revenue Procedure 2014-62 announces the indexed applicable percentage table in Section 36B(b)(3)(A) of the Internal Revenue Code, which is used to calculate an individual’s premium tax credit for taxable years beginning after calendar year 2015.  It also announces the indexed required contribution percentage in Section 36B(c)(2)(C)(i)(II) used to determine whether an individual is eligible for affordable employer-sponsored minimum essential coverage for purposes of Section 36B for plan years beginning after calendar year 2015.  Finally, Revenue Procedure 2014-62 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 Section 5000A(e)(1)(A) for plan years beginning after calendar year 2015.

Notice 2014-74 amends the two safe harbor explanations in Notice 2009-68, 2009-2 C.B. 423, that can be used to satisfy the requirement under Section 402(f) of the Internal Revenue Code (“Code”) that certain information be provided to recipients of eligible rollover distributions.  Amendments to the safe harbor explanations reflected in this notice relate to the allocation of pre-tax and after-tax amounts, distributions in the form of in-plan Roth rollovers, and certain other clarifications to the two safe harbor explanations.  The amendments to the safe harbor explanations (and attached model notices) may be used for plans that apply the guidance in section III of Notice 2014-54, 2014-41 I.R.B. 670, with respect to the allocation of pretax and after-tax amounts.

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

Source: Internal Revenue Service at www.irs.gov/pub/irs-drop/rp-14-62.pdf; http://www.irs.gov/pub/irs-drop/n-14-74.pdf; http://www.irs.gov/pub/irs-drop/n-14-76.pdf