"Health Care System Overhaul: Tax Code Changes"

The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, both enacted in March of this year, contain a number of tax related carrots and sticks in an effort to achieve health care reform's stated objectives. Although many of these provisions will not take effect for several years, some have a more immediate impact.  For example, as of March 30, 2010, employees are permitted to exclude from income the reimbursement by employers for the cost of coverage of an employee's child, and self-employed persons are permitted to take a deduction for the cost of coverage of the self employed person's child, in any tax year where the child has not yet attained age 27.

This Stroock Special Bulletin discusses selected tax provisions of these new laws.  The tax provisions are crucial to an understanding of the legislation, because in many cases, it is the taxes that modify behavior.  Although most of the changes to the Internal Revenue Code center around heath care reform, we also discuss revenue raisers and other miscellaneous provisions that were adopted.