We have received a number of questions regarding possible protective claims for ACA-related taxes. In light of those questions, we would like to clarify a few issues:
- An amended return is not required. You may simply submit a letter listing:
- The taxpayer’s name, address, SSN or ITIN, and other contact information;
- A description of the contingencies the claim is based on (in this case, the pending outcome of California v. Texas);
- The essential nature of the claim (the refund of the extra 0.9% Medicare tax and the 3.8% net investment income tax); and
- The specific year(s) for which a refund is sought.
- You are not required to list the specific amount of the refund request.
- The deadline for timely filed 2016 returns is July 15, 2020. For 2016 returns that were filed on extension, the due date is three years from the date the return was actually filed, if filed on or before October 15, 2017.
- You may file one claim listing all open years, but you are not required to do so.
We are also aware that some commentators feel these claims are unnecessary because California v. Texas (U.S. Supreme Court Docket 19-840) addresses the ACA in light of TCJA changes in 2018 and later years. However, there is a possibility that the Act, or a portion of the Act, could be found unconstitutional. This could mean refund claims for years prior to 2018 could be granted. In light of that, we felt it was important to make you aware of these potential refund claims. For a small amount of work, the payoff could be huge, especially for high net worth individuals.
Click here to download Spidell’s sample refund claim letter for these taxpayers.