For 2016, to be an HDHP, the policy must have a minimum
deductible of $1,300 for self-only coverage and $2,600 for family
coverage. Also, the maximum out-of-pocket limit under a policy
must be capped at $6,550 for self-only coverage and $13,100
for family coverage. If you have such a policy, then you can
contribute to an HSA. If the company contributes to an employee’s account, the company gets the deduction. If the employee
makes the contribution, the employee deducts it from gross
income (no itemizing is required).
For 2016, the maximum deductible contribution amount
to HSAs is $3,350 for self-only coverage and $6,750 for family
coverage. Those who are age 55 or older by year end can add
an additional $1,000. Thus, if you and your spouse are both age
62 in 2016 and have an HDHP providing family coverage, your
contribution limit is $8,750 ($6,750 + $1,000 +$1,000).
Find details about HSAs in IRS Publication 969. The
numbers haven’t been updated, but the basic rules are
unchanged.
4
Small Employer Health Insurance Credit
If you’re a small employer who isn’t required to
provide health coverage, you’re encouraged to do so
by means of a tax credit. You can reduce your tax bill
dollar-for-dollar by half of the premiums you pay if
you meet certain conditions:
• You pay at least 50 percent of the premiums for employees.
• You must have fewer than 25 full-time employees.
• The average annual wages for these workers cannot exceed
$25,000 for a full credit (double that until the credit phases
out). The payroll limit is adjusted annually for inflation (e.g.,
$25,800/$51,600 for 2015).
• You buy coverage through a government exchange for small
employers, called SHOPs.
• You have not already claimed the credit for two consecutive
years. Thus, if you already claimed the credit in 2014 and will do
so for 2015, you aren’t eligible for it in 2016 even if you meet all
of the conditions above.
5
Reporting Requirements
Regardless of whether you’re subject to the
employer mandate, if you provide health coverage
to employees in 2015, you have a new reporting
requirement starting in 2016. By Jan. 31, 2016, you’ll have to
furnish to employees Form 1095-B, Health Coverage, as well as
sending copies to the IRS by Feb. 29, 2016 (March 31, 2016, if
you transmit them electronically), to detail the 2015 coverage.
Find details about this form in the instructions to the form.
Conclusion
The tax rules are complex and growing more so each year.
Work with a knowledgeable tax advisor so you get things right.
S
Originally published on SmallBizTrends.com
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