Sep 14, 2014
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The Farm CPA

RSS By: Paul Neiffer, Top Producer

Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.

Are You Ready for Your $1 Excise Tax Filing Requirement!

Jun 18, 2013

Many farmers have taken advantage of a self-insured medical reimbursement plans or other similar plans.  In many cases, a farmer is able to deduct medical expenses that they might otherwise not deduct due to the 10% of AGI limitations or they do not itemize their deductions.

As part of the Affordable Health Care Act (ObamaCare), there is now a new excise tax effective as of 2012.  It is based upon the number of participants enrolled or covered by the plan and the tax is $1 a person if your plan year ends between October 1, 2012 and September 30, 2013 and rises 100% to a $2 per person tax for plan years ending by September 30, 2014 with an undetermined per person fee thereafter.

If a farmer has one of these plans that covers him, his spouse and four children, then the fee is $6, however, there are two methods of how to calculate the numbers covered and you may end up with a slightly different number under each method.  The filing deadline for this tax is July 31 and is based upon your year-end ending in the previous calendar year.  For example, a plan that had a calendar year-end for 2012 is required to file by July 31, 2013.

There is no de minimis exception to this filing and a penalty may apply for not making the required filing.

CliftonLarsonAllen LLP has provided additional information regarding this filing and you may access that information here.

Also, here is a link to the federal form 720 needed for filing.

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