IRS To Scrutinize Distinction Between Employees, Contractors As ACA Mandate Takes Effect.

The New York Times  (2/15, BU11, De Aenlle, Subscription Publication) reports that the IRS is expected to more heavily scrutinize the distinction between employees and self-employed independent contractors this year because of the Affordable Care Act’s requirement that employers with more than 50 workers offer health coverage. Jeffrey Saviano, Americas director of indirect tax at Ernst & Young, said, “The stakes are higher for companies and the government because of the implementation of the A.C.A. and the employer mandate taking effect in 2015.” Tax lawyer Ian Shane suggested that the desire to avoid the expense and hassle of compliance with the mandate provides an incentive for small businesses to classify some workers as contractors.

Meanwhile, the New York Times  (2/15, Rosen, Subscription Publication) reported that people “who overcame the challenges of Healthcare.gov and succeeded in buying health insurance under the Affordable Care Act last year now face a new set of hurdles in the form of daunting tax forms.” The article offers tips for taxpayers navigating the ACA’s new requirements, noting that those with employer-based health insurance or Medicare or Medicaid coverage will only have to check a box on Form 1040. People who qualify for an exemption from coverage will “need to fill out Form 8965.”

 

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