The Patient Protection and Affordable Care Act of 2010’s shared responsibility provision, commonly referred to as “play or pay,” was scheduled to take effect Jan. 1, 2014. But on July 2, the U.S. Treasury announced that the effective date would be delayed one year, to Jan. 1, 2015. IRS guidance will be issued providing more details and perhaps additional changes.
The original provision:

• In some cases imposes nondeductible penalties (generally $2,000 per full-time employee) on “large employers” that don’t offer coverage or that provide coverage that is “unaffordable” or that doesn’t provide “minimum value,” and
• Defines a “large employer” as one with at least 50 full-time employees, or a combination of full-time and part-time employees that’s “equivalent” to at least 50 full-time employees.

The rules are complex, and the new IRS guidance is expected to clarify — and perhaps simplify — them. Please contact us for the latest information and to determine how your company may be affected.

If you’re considering expanding your staff, hiring from certain disadvantaged groups before the end of 2013 can save you tax. The American Taxpayer Relief Act of 2012 extended the Work Opportunity credit for hires from most eligible groups through 2013.

Examples of eligible groups include food stamp recipients, ex-felons and nondisabled veterans who’ve been unemployed for four weeks or more, but less than six months. For these groups, the credit generally equals 40% of the first $6,000 of wages paid to qualifying employees, for a maximum credit of $2,400. A larger credit of up to $4,800 is generally available for hiring disabled veterans.

If you’re hiring veterans who’ve been unemployed for six months or more in the preceding year, the maximum credits are even greater:

• $5,600 for nondisabled veterans, and
• $9,600 for disabled veterans.

Please contact us for more information on how to qualify for the credit.