There were several important tax developments in 2013 that affect tax reporting by ministers, church staff, and churches in 2014 and beyond. The top 10 developments are explained here. Learn more about them, and many more, plus get comprehensive explanations of critical tax law matters year-round in the Church & Clergy Tax Guide.
#1: Penalty for noncompliance with the health insurance mandate
One of the most important and divisive provisions in the Affordable Health Care Act ("Obamacare") is a requirement that, beginning in 2014, "applicable individuals" requires to maintain "minimum essential" health care coverage or pay a penalty. A requirement that persons failing to provide such coverage would be subject to imprisonment was dropped during final consideration.
Beginning in 2014, failure to maintain minimum essential health care coverage will result in a penalty of the greater of $95 or 1 percent of income in 2014, $325 or 2 percent of income in 2015, and $695 or 2.5 percent of income in 2016, up to a cap of the national average "bronze plan" premium. Families will pay half the amount for children up to a cap of $2,250 for the entire family. After 2016, dollar amounts will increase by the annual cost of living adjustment.