Trump Signs Bill Delaying Three ACA Taxes

President Trump signed (HR 195) on January 22, delaying three ACA taxes: the medical device excise tax, the health insurance provider fee and the excise tax on high-dollar health plans. All three taxes were delayed in a temporary funding bill.

Prior Delays

The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) created all three of the taxes. Since passage of the ACA, stakeholders and lawmakers have called for their repeal or delay. Several years ago, Congress delayed the three taxes.

The new year brought renewed calls for further delays, especially the medical device tax. Without another delay, taxpayers would be liable for the first payment under the medical device tax before the end of January.

New Delays

The new law delays all three ACA taxes again. The law suspends the medical device tax for 2018 and 2019 and delays the health insurance provider fee for one more year. The excise tax on high-dollar health plans will take effect in 2022.

“We applaud Congress for delaying the excise tax on high-dollar health plans,” James Klein, president, American Benefits Council, said. “We will continue efforts to fully repeal this tax and appreciate that Congress has passed this two-year delay as a down payment for full repeal,” Klein added.

However, the excise tax on high-dollar health plans has supporters. “The tax is a really important health policy and fiscal policy. It could be reformed or replaced with an alternative instrument. But should not be delayed yet again,” Jason Furman, past chair, Council of Economic Advisors, tweeted.

Tax Extenders

Now that Congress has delayed the three ACA taxes, some lawmakers are looking to attach a package of tax extenders to the next funding bill. A number of extenders expired after 2016, including the higher education tuition and fees deduction, Indian employment credit and incentives for biodiesel and alternative fuels.

The funding bill signed by President Trump runs through February 8. Lawmakers need to pass another funding bill to keep the IRS and the federal government open after that date.

By George L. Yaksick, Jr., Wolters Kluwer News Staff

Federal Register Printing Savings Act of 2017, Enrolled, as Signed by the President on January 22, 2018, HR 195

JCT Estimated Revenue Effects of the Revenue Provisions Contained in the Extension of Continuing Appropriations Act, 2018, as Passed by the Congress on January 22, 2018, JCX-2-18

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