Governor Signs Health Care Tax Conformity Bill!      APRIL 10, 2011


Yesterday Governor Brown signed AB 36, his first bill implementing
federal
health care reform*just in time for tax day. AB 36 (Perea) conforms
California personal income tax law with federal income tax law
contained in
federal health care reform, the Affordable Care Act. One of the most
popular
provisions of the ACA allows parents to enroll or keep their 19-26 year
old
children on their health coverage, even if they were not dependents.
CalPERS
reported that 27,000 children of employees enrolled in CalPERs gained
coverage this year. However, without tax conformity, employees were on
the
hook for paying taxes on the dollar amount of their adult child*s
coverage.

AB 36 fixes that problem and takes effect immediately as a tax levy.
Additionally, the change is retroactive to September 23, 2010-the
effective
date for this provision of the Affordable Care Act, so it aligns with
when
parents started adding kids to their coverage.



As tax day approaches, there are a few things that parents need to do
in
order to make sure their kids* coverage is tax-exempt. The details
are on
the FTB*s website at:
http://www.ftb.ca.gov/professionals/taxnews/Patient_Protection_and_Affordable_Care_Act.shtml

.



If you have any other questions, let us know, we*re compiling
information
about what employees need to do to comply with the new law.

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