Hyden, Miron & Foster, PLLC Law Blog

Sunday, February 26, 2017

Repealing Obamacare Could Impact Your Taxes

Will my taxes be reduced if the Affordable Care Act is repealed?

President Trump has vowed to repeal the Affordable Care Act, commonly referred to as Obamacare.  With a Republican Congress and support for Obamacare waning even among Democrats, it is increasingly likely that Obamacare will be eliminated or at least significantly modified in the coming years.  As Arkansas tax law attorneys, we recognize that, at its core, Obamacare is arguably more of a tax law than a health care law.  The Affordable Care Act contains numerous tax provisions.  Its elimination could directly or indirectly impact your individual and business taxes.  

Obamacare Taxes You May Not Know About

The Affordable Care Act contains numerous tax provisions that you likely do not even know exist. Some taxes that could be eliminated with its repeal include:

  • 3.8% Net Investment Income Tax:  Depending on your income, Obamacare adds a 3.8% tax on top of your capital gains, interest, or dividends.
  • 3% Tax on Medical Device Manufacturers:  While this may not directly impact you, it has widespread indirect implications for everyone from healthcare workers to patients.
  • Shared Responsibility Payment:  If you do not purchase insurance currently, you receive a tax penalty known as a Shared Responsibility Payment.  The tax is the greater of 2.5% of your income for taxpayers that individually make over $10,300 for singles and $20,600 for married couples filing jointly, or $695 per adult, with a maximum of $2,085 for a family.  
  • Employer Mandated Insurance:  Business owners with more than 50 employees must provide health insurance to all full time employees, which equates to $2,000 per employee or $3,000 if the employee uses tax credits to purchase insurance on the marketplace.  

These are just a few of the tax provisions found within the Affordable Care Act.  Eliminating Obamacare could reduce your individual and business tax payments, but some individuals may lose their assistance with health insurance.  Contact our Arkansas tax law lawyers at Hyden, Miron, & Foster, PLLC, for individualized assistance for all of your tax needs by calling (501) 482-1787.

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