Monday, September 30, 2013

Annual Update of Real Estate Tax Credit for Certain Persons Age 65 and Older - Senior Circuit Breaker Credit

I.  Introduction

For tax years beginning on or after January 1, 2001, an owner or renter of a principal residence located in Massachusetts who is age 65 or older at the close of the taxable year may be eligible to claim a refundable credit against personal income taxes.  Known as the “circuit breaker credit,” this credit is based upon the actual real estate taxes or rent paid by a taxpayer eligible to claim the credit.  See G.L. c. 62, § 6(k), added by sections 80 and 81 of chapter 127 of the Acts of 1999.  This TIR updates TIR 01-19 by providing the income and assessed valuation threshold amounts and the maximum credit amount for tax year 2013.

II.  2013 Income Threshold Amounts for Renters and Homeowners

A Massachusetts taxpayer age 65 or older that owns or rents his or her principal residence may qualify for the circuit breaker credit if he or she meets the eligibility requirements as stated in TIR 01-19, Real Estate Tax Credit for Certain Persons Age 65 and Older.

Under G.L. c. 62, § 6(k)(4), for purposes of calculating the circuit breaker credit, total income, and maximum credit thresholds are adjusted annually to reflect inflation for the calendar year in which the taxable year begins.

Thursday, September 19, 2013

Time for a Moratorium on Expensive Health Insurance Mandates

Massachusetts should place a moratorium on expensive new health insurance mandates or require a premium impact statement for proposed mandates, AIM told Beacon Hill lawmakers today.

Kristen Lepore, Vice President of Government Affairs at the association, said Massachusetts has passed a dozen health coverage mandates since the 2006 reform and that the cost of those mandates falls disproportionately on small businesses and their employees.

“Massachusetts employers and consumers already pay the highest health-care premiums in the country at $16,953 per year for a family plan and these costs are expected to increase in the coming year as many components of the Affordable Care Act add costs to insurance premiums,” Lepore told a hearing of the Legislature’s Joint Committee on Health Care Financing.

“ The state should not be adding to the already high cost of health insurance and must therefore resist adding new mandates to health insurance coverage.”

The cost of a family health insurance plan in Massachusetts increased 72 percent from 2003 to 2011, raising the burden on purchasers from 12.6 to 18 percent of median family income.

A moratorium would help state government as well, according to Lepore, because health mandates also add liabilities to the budget.  According to guidance from the U.S. Department of Health and Human Services, the state has a financial obligation to pay for any increased costs of additional mandates passed after December 2011 that go beyond the state’s benchmark plan.  The state is already under financial obligation to pay for the increased costs associated with three new mandated benefits passed since this new rule took effect.

The moratorium bill would also repeal the requirement that the state produce an annual so-called Fifty-Plus Report  - known colloquially as the “Name and Shame” report- that identifies employers with 50 or more employees receiving health services through one or more of the state’s publicly subsidized health care programs. The report is unnecessary and unfair since employers are carrying out their legal responsibilities under the law and are offering the required health insurance coverage to benefit eligible employees.

Lacking a moratorium, AIM supports legislation requiring that a premium impact statement accompany all health insurance and health care related legislative and regulatory changes.

“All too often, legislative bills are passed and regulations are made, without an understanding of the effect they will have on insurance premiums.  Creating new mandated benefits is the obvious example but also consider the following regulatory and legislative decisions that impact premium costs,” Lepore said.

She offered several examples of recent regulatory and legislative decisions that have increased premiums:

  • Requiring that all Essential Health Benefit changes apply to both the small and large group market.
  • Requiring that gym memberships and weight loss discounts be included in the state’s Essential Health Benefits.
  • Requiring compliance with and implementation with reporting to the state’s All Payer Claims Database (APCD).
  • Expanding infertility by regulations.

AIM also supported a proposal to repeal the so-called Free Rider Surcharge created under the state health reform law. The provision is no longer required as Massachusetts conforms to the requirements of the new federal Affordable Care Act.

John Regan AIM Business Insider

Monday, September 16, 2013

IRS Provides Tax Relief to Victims of Colorado Storms

WASHINGTON DC –– The Internal Revenue Service is providing tax relief to individual and business taxpayers impacted by severe storms, flooding, landslides and mudslides in Colorado.

The IRS announced today that certain taxpayers in the counties of Adams, Boulder, Larimer and Weld will receive tax relief, and other locations may be added in coming days following additional damage assessments by the Federal Emergency Management Agency (FEMA).

The tax relief postpones certain tax filing and payment deadlines to Dec. 2, 2013. It includes corporations and businesses that previously obtained an extension until Sept. 16, 2013, to file their 2012 returns and individuals and businesses that received a similar extension until Oct. 15. It also includes the estimated tax payment for the third quarter of 2013, which would normally be due Sept. 16.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 866-562-5227 to request this tax relief.

Practitioners located in the covered disaster area who maintain records necessary to meet a filing or payment deadline for multiple taxpayers outside the disaster area may contact the IRS to identify such clients using the procedures described on the IRS website.

Full details, including information on how to claim a disaster loss by amending a prior-year tax return, can be found in The IRS encourages taxpayers and tax practitioners to monitor the Tax Relief in Disaster Situations in for updates.

Friday, September 13, 2013

Employer Notice RE Health Insurance Due to Employees October 1st

Part of the Affordable Care Act requires many employers to give employees a Notice regarding Health Insurance available through the employer.  The original due date of this Notice was March 1, 2013, but the Department of Labor (DOL) moved this date back to October 1, 2013.  The notice must be given to all employees regardless of their full-time or part-time status.  Employees that are hired after October 1, 2013, must be given the notice at the time of hiring (defined as “within 14 days of the employee’s start date”).

Firms covered by the FLSA (Fair Labor Standards Act) are generally required to provide a notice to employees of health insurance coverage options available to them.  This appears to include most firms that have $500,000 or more in annual dollar volume of business AND at least one employee.  Businesses in the following categories also appear to be required to provide this notice regardless of their dollar volume of business:  hospitals; institutions primarily engaged in the care of the sick, aged, mentally ill, or disabled who reside on the premises; schools for children who are mentally or physically disabled or gifted; preschools, elementary and secondary schools, and institutions of higher education; and federal, state, and local government agencies.  More details can be found on the DOL and FLSA web sites.  We recommend everyone provide this notice as a way to avoid any adverse consequences.  We do not currently see penalties associated in connection with this Notice requirement, but we have not looked carefully for such.

The DOL has created Model Notices for this purpose.  They can be found by going to and typing MODEL NOTICE in the Search box.  Or go to, click on Affordable Care Act under the RESOURCES heading, and then on the Model Notices link.

There are two model notices:  one for employers who offer a health plan to some or all employees, and one for employers who do not offer a health plan.  The model plans are available in pdf format (English or Spanish) as well as in MS Word format.

More information regarding this requirement can be found at the DOL website.  We can also send you the English pdf copy of the Notices attached to an email upon request.

Wednesday, September 11, 2013

Remember 9-11-2001

September 11th, 2001 changed the lives of many. Never forget that terrible day when we lost over 3000 of our family and friends in the tragic events.

Monday, September 9, 2013

FBAR Has a New Form

The former TD F 90-22.1 used to report foreign bank and financial accounts is being replaced with a FinCEN Form 114, Report of Foreign Bank and Financial Accounts.  The new form is still called an FBAR.

A pdf version of the new form can be found on  The front page of the pdf version has boxes at the top that say:  Save, Validate, Submit, Print, and Close.  It reminds taxpayers that the due date is June 30th.

This front page also has a segment that says:

“This report filed late for the following reason (Check only one):”  and has checkboxes for ten reasons including “Forgot to file”, “Did not know that I had to file”, and of course “Other (please provide explanation below).”

There is now a 3rd party preparer signature line on page 1 of the report.

Don’t forget all FBARs filed after June 30, 2013, must be filed electronically.

-This text has been shared with you courtesy of:  David & Mary Mellem, EAs & Ashwaubenon Tax Professionals

Friday, September 6, 2013

Form 8949 and Schedule D Changes for 2013

First is a minor graphical change in the boxes on the Form 8949.  Formerly Part I (short-term) and Part II
(long-term) both had boxes A, B, and C.  Now IRS has changed the Part II (long-term) boxes to be D, E, and F.  Presumably this will help avoid confusion.

Second are two new lines on Schedule D.  These are lines 1a (short-term) and 8a (long-term).  The line says “Totals for all short-term transactions reported on Form 1099-B for which basis was reported to the IRS and for which you have no adjustments (see instructions).  However, if you choose to report all these transactions on Form 8949, leave this line blank and go to line 1b.”  Since IRS already has the sales price, basis, gain, and short-term/long-term, reporting the details on the Form 8949 is to some extent redundant, therefore IRS is saying we can just report the total of the proceeds, costs, and gains from these Form 1099-B’s that report all three items to IRS.

Third is the “Available Upon Request” option.  In past years IRS has required each individual Form 8949/Schedule D sale to be reported on a separate line.

Thursday, September 5, 2013

Defense of Marriage Act – IRS Rules for 2012 and Before

Recently the Supreme Court determined legally married same sex couples are married for Federal tax purposes.

For purposes of income tax return filing, this means the couple is a married couple and therefore will file MFJ or MFS (or HH if the married taxpayer meets the special conditions that allow a married person to be treated as unmarried).  Such a Court ruling is retroactive since it did not specifically designate an effective date.  The Court’s ruling only affects taxpayers who are married; it does NOT affect taxpayers who have entered into a registered domestic partnership, civil union, or other similar formal relationship recognized under state law that is not denominated as a marriage under the laws of that state.

As a retroactive ruling this means any open year tax returns filed as if the taxpayer was single are incorrect.

Wednesday, September 4, 2013

Affordable Care Act Through Health Source Rhode Island Exchange

The new Health Exchange for Rhode Island, HealthSource RI, is putting on presentations in each city/town across the state between now and September 30th.  These presentations are offered to the public at no cost, and discuss the implications of the Affordable Care Act to Rhode Island businesses and individuals.  For a complete list of presentations, visit

The SBA is co-sponsoring the following presentations with HealthSource RI:

September 11th, 8:30-10:30am – Hampton Inn & Suites, 2100 Post Road in Warwick
September 25th, 6:00-8:00pm – Narragansett Community Center, 53 Mumford Road in Narragansett
September 26th, 6:00-8:00pm – East Providence Public Library, 475 Bullocks Point Avenue in East Providence

All presentations are offered free of charge.  For more information, please call 401-528-4561.

Tuesday, September 3, 2013

The Affordable Care Act and Your Company: Event Series in Massachusetts

Join The Massachusetts Health Connector and Associated Industries of Massachusetts (AIM) for a unique opportunity to hear from and speak with executives from key regulatory agencies on federal health care reform and its implementation in the commonwealth. In addition, AIM’s in-house experts will discuss day-to-day management, timelines, compliance and administrative implications for the employer community.

Effective January 1, 2014, the Federal Affordable Care Act (ACA) will change the manner in which employers determine their health plan strategy. Premium tax credits, cost sharing subsidies, Medicaid expansion, health insurance taxes, rating factor changes, employer shared responsibility assessments and the federal individual mandate will redefine “affordable insurance”. The Massachusetts Health Connector will play a key role in the delivery of health insurance products, individual subsidies and employer assessments.