Trade Preferences Extension Act Restores Health Coverage Tax Credit, Increases ACA Misfiling Penalties

In June, the President signed the Trade Preferences Extension Act of 2015 (TPEA).

Among other provisions, the TPEA restored the Health Coverage Tax Credit (HCTC), which previously expired at the end of 2013. The HCTC subsidized health insurance premiums for certain retirees and employees who were laid off due to foreign competition against U.S. companies. The HCTC will be in effect through the end of 2019. The IRS has stated that guidance regarding the HCTC will be released shortly.

Additionally, the TPEA sharply increased the penalties employers must pay for filing incorrect 6055 and 6056 forms required by the Affordable Care Act. On or after December 31, 2015, the penalties for misfiling or failing to file these forms will roughly double, and no relief will be available for employers who fail to file on time and do not make a good faith effort at complying with reporting requirements. This means that employers will have more financial skin in the game when it comes to filing timely and accurate 6055 and 6056 forms.

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