EO Update June 24, 2010
Issue Number: 2010-15
Inside This Issue:
- Affordable Care Act Provides Expanded Benefits to Health Professionals in Underserved Areas
- Applications for Therapeutic Discovery Project Tax Credit
- FAQs on Excise Tax on Indoor Tanning Services
- Revised Publication on Tax Sheltered Annuities Issued
1. Affordable Care Act Provides Expanded Benefits to Health Professionals in Underserved Areas
The Internal Revenue Service announced that health care professionals who received student loan relief under state programs that reward those who work in underserved communities may qualify for refunds on their 2009 federal income tax returns as well as an annual tax cut going forward under a new provision in the Affordable Care Act. Employers, including tax-exempt employers, in underserved areas can help eligible health professionals take advantage of this new benefit.
Employers of eligible medical professionals who withheld and paid taxes under the Federal Insurance Contributions Act (FICA) on payments covered under the new exclusion may seek a refund of withheld FICA on the employee’s behalf. Also, because employers also pay a portion of the FICA tax, the employer also may be entitled to a refund as well.
For more information on the Affordable Care Act provisions as well as news releases and other legal guidance, go to IRS.gov.
2. Applications for Therapeutic Discovery Project Tax Credit
The Internal Revenue Service recently announced that small firms, including qualifying tax-exempt entities, may now begin applying for certification for tax credits available under the Qualifying Therapeutic Discovery Project Program, created by the Affordable Care Act (ACA). Applications must be postmarked no later than July 21, 2010.
The Department of Health and Human Services (HHS) will evaluate each project for its potential to produce new therapies, reduce long-term health care costs or cure cancer within 30 years. Only projects that show a reasonable potential to meet these goals will be certified as eligible. While some applicants may elect to receive a grant in lieu of a credit, 501(c) organizations are not eligible for grants under the ACA provisions. For more information and guidance see IRS.gov.
3. FAQs on Excise Tax on Indoor Tanning Services
Beginning July 1, 2010 indoor tanning services will be subject to a new 10 percent excise tax. Exempt organizations that provide tanning services are encouraged to review the new FAQs on the administration of the new tax on IRS.gov.
Want to brush up on your knowledge of exempt organization compliance requirements and ensure that your organization maintains its tax-exempt status? The IRS provides on-line training for tax-exempt organizations at www.StayExempt.irs.gov. The site includes a virtual workshop - web-based version of the popular Exempt Organization workshops - and a number of mini-courses on topics of interest to tax-exempt organizations.
5. Revised Publication on Tax-Sheltered Annuity Plans Issued
The IRS has released an update of Publication 4483, 403(b) Tax Sheltered Annuity Plan for Sponsor. The publication explains the rules applicable to plans in order to remain in compliance with the law, maximize employees' retirement benefits, and avoid additional taxes and penalties.
Visit IRS.gov for additional information on retirement plans for tax-exempt organizations.