During this difficult time, DGC provides you with updates and resources here.
Did you pay net investment income tax (NIIT) or additional Medicare tax in the 2016 taxable year? If so, you may want to file a protective claim this week to preserve a potential refund. That’s because an upcoming Supreme Court case concerning the constitutionality of the Affordable Care Act’s (ACA) individual mandate could impact NIIT and the additional Medicare tax as well.
These taxes were not included in the ACA. However, because the ACA’s individual mandate shares many similarities with the tax, an unconstitutional Supreme Court ruling concerning the individual mandate might set the wheels in motion for another case that could deem both taxes invalid. This would potentially impact all tax returns from 2016 through 2019, and taxpayers who paid NIIT and/or additional Medicare tax might then be eligible for a refund.
Since the deadline to file a protective claim for a 2016 tax return for some taxpayers is this Wednesday (July 15th), affected taxpayers need to act now to ensure that they are well-positioned to receive a possible refund if any changes are made to the ACA.
DGC is already reaching out to our impacted clients to inform them of the situation. If you have not yet heard from a member of your DGC client service team, we will be contacting you shortly. Our team will continue to monitor this situation closely. If you have any questions concerning NIIT, please reach out to your main contact at DGC or Erica Nadeau, CPA, MST at 781-937-5311 / firstname.lastname@example.org.