There were several important tax developments in 2015 that affect tax reporting by ministers, church staff, and churches in 2015 and beyond. The top ten developments are explained in this article.
1. Employer "play or pay" penalty postponed to 2015
The Affordable Care Act (ACA) does not require employers to provide health insurance for their employees. Instead, it places the responsibility to obtain coverage on individuals and makes them subject to a penalty for noncompliance. However, an "applicable large employer" that does not offer coverage for all of its full-time employees, offers minimum essential coverage that is unaffordable, or offers minimum essential coverage that consists of a plan under which the plan's share of the total allowed cost of benefits is less than 60 percent is required to pay a penalty if any full-time employee is certified to the employer as having purchased health insurance through a state exchange with respect to which a tax credit or cost-sharing reduction is allowed or paid to the employee.
The penalty is an excise tax that is imposed for each employee who receives a premium tax credit or cost-sharing reduction for health insurance purchased through a state exchange. For each full-time employee receiving a premium tax credit or cost-sharing subsidy through a state exchange for any month, the employer is required to pay an amount equal to one-twelfth of $3,000. The penalty for each employer for any month is capped at an amount equal to the number of full-time employees during the month (regardless of how many employees are receiving a premium tax credit or cost-sharing reduction) in excess of 30 employees (80 for 2015 only) multiplied by one-twelfth of $2,000.