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CRS — Health Coverage Tax Credit (April 2, 2015)

April 15, 2015 Comments off

Health Coverage Tax Credit (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The health coverage tax credit (HCTC) expired on January 1, 2014. This federal income tax credit subsidized most of the cost of qualified health insurance for eligible taxpayers and their family members. The Trade Act of 2002 (P.L. 107-210) first authorized the HCTC. Potential eligibility for the HCTC was limited to three groups of taxpayers, two of whom were individuals eligible for Trade Adjustment Assistance (TAA) allowances because they experienced job loss. The third group consisted of individuals whose defined benefit pension plans were taken over by the Pension Benefit Guaranty Corporation because of financial difficulties. Moreover, these potential HCTC-eligible individuals were allowed to claim the tax credit only if they either could not enroll in certain other health coverage (e.g., Medicaid) or were not eligible for other specified coverage (e.g., Medicare Part A)

To claim the HCTC, eligible taxpayers had to have qualified health insurance (specific categories of coverage, as specified in statute). Several of those categories required state action (statequalified health plans) to become available. As of December 2010, 44 states and the District of Columbia made available at least one of the state-qualified health plans. In the remaining six states, the categories of qualified health insurance that were potentially available were ones that were not dependent on state action (automatically qualified health plans), though not necessarily all persons who were eligible for the HCTC could avail themselves of these options.

IRS — Victims of Identity Theft Continue To Experience Delays And Errors In Receiving Refunds

April 10, 2015 Comments off

Victims of Identity Theft Continue To Experience Delays And Errors In Receiving Refunds
Source: Treasury Inspector General for Tax Administration

Victims of identity theft continue to experience delays and errors in receiving refunds, according to a report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).

This audit follows up on a 2013 TIGTA report which concluded that the Internal Revenue Service (IRS) was not providing quality customer service to identity theft victims. The objective was to determine whether the IRS is improving its assistance to victims of identity theft.

On average, the IRS took 278 days to resolve the tax accounts of identity theft victims due a refund, according to TIGTA’s review of a statistically valid sample of 100 identity theft tax accounts resolved in the Accounts Management function in Fiscal Year (FY) 2013. That is an improvement over the average 312 days it took the IRS to resolve tax accounts of identity theft victims due a refund in FY 2012.

Available Evidence Suggests That Possible Regulation of Cigarettes Not Likely to Significantly Change U.S. Illicit Tobacco Market

April 9, 2015 Comments off

Available Evidence Suggests That Possible Regulation of Cigarettes Not Likely to Significantly Change U.S. Illicit Tobacco Market
Source: National Research Council and Institute of Medicine

Although there is insufficient evidence to draw firm conclusions about how the U.S. illicit tobacco market would respond to any new regulations that modify cigarettes—for example, by lowering nicotine content—limited evidence suggests that demand for illicit versions of conventional cigarettes would be modest, says a new congressionally mandated report from the National Research Council and Institute of Medicine.

Tobacco use has declined in the past few decades due to measures such as high taxes on tobacco products and bans on advertising, though there are still more than 1 billion people worldwide who regularly use tobacco, including many who purchase their products illicitly. Illicit tobacco markets can undermine public health efforts to reduce tobacco use, while depriving governments of revenue. In the United States, the revenue losses are borne mostly by the states.

Earned Income Tax Credit in the United States

April 9, 2015 Comments off

Earned Income Tax Credit in the United States
Source: Urban Institute

The Earned Income Tax Credit (EITC) provides substantial assistance to low-income working families with children. The credit encourages work for many, though may reduce work or wages for some. Counted in the poverty measure, the EITC would have been credited with lifting 6.5 million people out of poverty in 2012. The credit fails to provide substantial benefits to workers without children, is complicated, has a high erroneous payment rate, and creates substantial marriage penalties for some low- and moderate-income couples. Extending the credit to workers without children or replacing it with an individual worker credit could solve some or all of these criticisms.

Tax Freedom Day® 2015 is April 24th

April 2, 2015 Comments off

Tax Freedom Day® 2015 is April 24th
Source: Tax Foundation

Key Findings

  • This year, Tax Freedom Day falls on April 24, or 114 days into the year.
  • Americans will pay $3.3 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total bill of more than $4.8 trillion, or 31 percent of the nation’s income.
  • Tax Freedom Day is one day later than last year due mainly to the country’s continued steady economic growth, which is expected to boost tax revenue especially from the corporate, payroll, and individual income tax.
  • Americans will collectively spend more on taxes in 2015 than they will on food, clothing, and housing combined.
  • If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 14 days later on May 8.
  • Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation’s tax burden.
Categories: Tax Foundation, taxation

Reducing Poverty in the United States: Results of a Microsimulation Analysis of the Community Advocates Public Policy Institute Policy Package

March 30, 2015 Comments off

Reducing Poverty in the United States: Results of a Microsimulation Analysis of the Community Advocates Public Policy Institute Policy Package
Source: Urban Institute

A package of five policies—a transitional jobs (TJ) program, a $10.10 minimum wage, expanded earned income tax credits, a tax credit for senior citizens and people with disabilities, and expanded child care subsidies—could cut the national poverty rate by at least half. Using the TRIM3 microsimulation model and the Supplemental Poverty measure, the analysis shows the national poverty rate falling fall from 14.8 percent to either 7.4 percent or 6.3 percent, depending on the take-up rate assumed for the TJ program. Poverty is greatly reduced for all age groups and race/ethnicity groups.

IRS Tax Delinquency Report Shows Federal Employees Owe $1 Billion

March 27, 2015 Comments off

IRS Tax Delinquency Report Shows Federal Employees Owe $1 Billion
Source: U.S. House of Representatives, Committee on Oversight and Government Reform

The Internal Revenue Service (IRS) today released its 2014 tax delinquency report, which identifies the total number of federal civilian employees who are tax-delinquent and the total amount owed in past-due taxes. Tomorrow, House Oversight and Government Reform Committee Chairman Jason Chaffetz (UT-03) will hold a mark-up to examine eight bills including the Federal Employee Tax Accountability Act of 2015 [H.R. 1563], which was introduced in the House this week.

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