November 2015

2015 IRA Contribution Deadline is Monday, April 18, 2016 Due to Emancipation Day

The federal rule is that when April 15th falls on Saturday, Sunday or a legal holiday, then a tax return is considered timely if filed on the next succeeding day which is NOT a Saturday, Sunday or holiday. Emancipation Day is April 16th and it is a legal holiday in Washington, D.C. In some years this holiday will impact the deadline for filing federal income tax returns. In 2016, April 15th falls on Friday. However, Washington D.C. observes Emancipation Day on Friday since it falls on a Saturday. This means in 2016, April 15th is a holiday for federal income tax purposes. Consequently, the filing deadline for all tax forms and payments required to be filed or completed on or before April 15th (as described in Section 6072(a), including the Form 1040 returns) will be Monday April 18th, 2016. This April 18, 2016 deadline applies to traditional and Roth IRA contributions, HSA contributions and CESA contributions.

The federal rule is that when April 15th

falls on Saturday, Sunday or a legal holiday,

then a tax return is considered timely

if filed on the next succeeding day

which is NOT a Saturday, Sunday or holiday.

Emancipation Day is April 16th and it

is a legal holiday in Washington, D.C. In

some years this holiday will impact the

deadline for filing federal income tax

returns.

In 2016, April 15th falls on Friday.

However, Washington D.C. observes

Emancipation Day on Friday since it falls

on a Saturday. This means in 2016, April

15th is a holiday for federal income tax

purposes. Consequently, the filing deadline

for all tax forms and payments

required to be filed or completed on or

before April 15th (as described in Section

6072(a), including the Form 1040

returns) will be Monday April 18th,

2016.

This April 18, 2016 deadline applies to

traditional and Roth IRA contributions,

HSA contributions and CESA contributions.

An IRA Distribution May Disqualify a Person For the Premium Tax Credit.

The premium tax credit (PTC) is a refundable tax credit authorized under the Affordable Care Act. It assists individuals and families with low or moderate income to afford health insurance purchased through a health insurance marketplace. A person is ineligible for this credit if the health insurance coverage is purchased outside the marketplace. A person who is eligible to enroll in certain employer-sponsored coverage or government programs such as Medicare, Medicaid or TRICARE is ineligible. To be eligible and to obtain this credit a person must meet certain requirements and must file a federal income tax return. One of the requirements is that a person's household income must fall within a certain range.

If a person is receiving this credit, before taking any IRA distribution he or she will want to determine that such an IRA distribution will not make him or her ineligible to receive this credit. A person becomes ineligible for this credit if his or her household income exceeds more than 400% of the Federal poverty line for his or her family size. A person will be required to repay any advance payment he or she receives for which he or she later becomes ineligible. For 2015, the limit is $45,960 for an individual, $62,040 for a family of two and $94,200 for a family of four. A person will want to review Publication 974 and other IRS guidance.