Hiring For the Summer? Know the ACA Rules

If you're an employer, what you have to do to comply with Affordable Care Act (ACA) rules depends on the size of your workforce. When you have 50 or more full-time employees – a total that can include seasonal workers – you have to deal with additional reporting and coverage requirements known as the "employer shared responsibility" provisions. Those provisions mean you need to offer a minimum level of affordable health coverage to full-time employees and their dependents. Otherwise you may have to pay a penalty, if even one of your full-time employees receives a tax credit for buying individual coverage on the government health insurance website.

What's a full-time employee?
 A worker who averages 30 or more hours per week (or 130 hours per month) is considered full-time. But you also need to consider "full-time equivalent" employees. You can determine how many full-time equivalent employees you have by multiplying the number of part-time employees by average hours worked, and dividing the result by the hours required for full-time status. For example, 20 employees working an average of 15 hours per week are equivalent to 10 full-time employees (20 employees times 15 hours divided by 30 hours).

Seasonal employees are generally included in the computation.
 However, there is an exception you'll want to be aware of. Say your workforce exceeds 50 full-time and full-time equivalent employees for 120 days or fewer during a calendar year. If, during that period, the employees in excess of 50 were seasonal workers, you're generally not subject to the employer shared responsibility provisions. What if your workforce exceeds the limit? You may have to offer health insurance to seasonal workers who meet specific weekly work-hour requirements during a look-back "measurement period." The measurement period is a specified number of months during which you track an employee's hours.
ACA requirements apply to nearly every employer in some form, and the rules get complicated quickly.
Please contact us for details.
Call us at (219) 769-3616 with your questions, or email them to dvanprooyen@swartz-retson.com.

Tax News - 2016 Changes to Note

Effective beginning with 2016 taxable years, the de minimis tangible property safe harbor has increased to $2,500 per invoice or item. The change affects regulations issued in 2013 that clarified when your business could expense tangible real and personal business property. Previously, the de minimis safe harbor let you elect to deduct individual capital expenditures of $500 or less if your business did not have an “applicable financial statement.” (In general, an applicable financial statement is a financial statement based on a certified audit by an accounting firm.)

The extender legislation passed in December made changes to ABLE accounts. ABLE accounts – named for the Achieving a Better Life Experience Act that created them – are tax-beneficial savings accounts for qualified individuals with disabilities. The extender legislation eased the requirement that you had to open the account in the beneficiary’s state of residence. Now you are free to open an ABLE account with any state program you choose.

Three Section 179 expensing deduction changes may affect your 2016 tax planning. First, the $2,000,000 phase-out limit was adjusted for inflation and is $2,010,000 for 2016. (The $500,000 deduction amount did not change.) Second, you may be able to deduct more of qualified leasehold, retail, and restaurant property in 2016.
The $250,000 cap on the amount of Section 179 you could claim for this property was eliminated. Third, air conditioning and heating units are now eligible for Section 179 expensing.

You have new options for funding your myRA this year. In the past, you could fund your account from your paycheck by completing a direct deposit authorization form and giving it to your employer. That option is still available. In addition, now you can choose to make direct deposits from a checking or savings account or from your federal income tax refund. A myRA (my Retirement Account) is a simplified Roth IRA that costs nothing to open, has no fees, and lets you start saving with any amount that fits your budget. The maximum contribution for 2016 is $5,500 ($6,500 when you're age 50 or older at the end of the year).

Call us at (219) 769-3616 with your questions, or email them to tlynch@swartz-retson.com.