Healthcare Legislation creates many tax law changes over multiple years

The Patient Protection and Affordable Care Act and the related Health Care and Education Reconciliation Act (which are collectively referred to as the healthcare legislation) were signed into law in March. Lots of tax changes are included in the laws. Some have nothing to do with healthcare, some won't kick in for several years, some are effective right now, and some are even retroactively effective.

Over the next few weeks, I will briefly summarize some of the most important tax changes, organized by the year when they become effective.

RETROACTIVE CHANGES TAKING EFFECT BEFORE 2010

Exclusion for Certain Forgiven Student Loans:  A new, retroactive federal income tax exclusion for student loan amounts paid off or forgiven under certain state loan repayment/ forgiveness programs intended to increase the presence of healthcare professionals in underserved areas.  The effective date for this change is for amounts received or forgiven after 2008.

Therapeutic Discovery Projects:  A new, retroactive tax credit for qualified investments in therapeutic discovery projects, as defined in the law. This credit is only available to taxpayers with 250 or fewer employees.  This credit is available for eligible expenses paid or incurred in 2009 and 2010 ($1 billion limit on total credits allowed).

Keith L. Jones is a CPA with offices in Port St. Joe