In June, the U.S. Supreme Court decided that the Patient Protection and Affordable Care Act of 2010 was constitutional. The basis for its decision: that the penalty for not carrying health coverage starting in 2014 (called the individual mandate) is really a tax and that this taxing power is within Congress’s authority.
Effect of the decision
What does this mean for you? Provisions of the law that have already taken effect continue to be effective. These include:
New tax rules starting in 2013
The way that Congress plans to pay for extended health coverage is to raise taxes. Here are the key tax rules set to take effect under this law in 2013:
New tax rules set for 2014
This is the year in which the individual mandate—the linchpin of the entire law—is set to become effective. It means that you will be required to carry health coverage—through your employer, Medicare, Medicaid, private insurance, or a state health exchange. Those who are low income but do not qualify for Medicaid or have other coverage will receive government assistance with paying premiums through a tax credit.
Those who opt not to carry coverage will pay a penalty, which we now know is a tax that will be collected by the IRS.
Because of the political climate and the upcoming November election, the rules set to take effect could be changed dramatically or repealed entirely. Stay tuned!
Tax Refunds Abound
About 110.9 million refunds were issued to individuals for the 2010 tax year (the most recent year for statistics). The average refund was $2,953. The total amount of refunds was $327.4 billion.
Source: Office of the National Taxpayer AdvocateView all factoids