This is a brief follow-up to my post yesterday about the Patient-Centered Outcomes Trust Fund Fee. Is the fee deductible as a business expense?
The fee is technically considered to be an excise tax, because it is reported on a Form 720 (Quarterly Federal Excise Tax Return). Excise taxes are often not deductible as business expenses.
See, for example, the other excise taxes created by the Affordable Care Act that impose excise taxes on employers with 50+ full-time employees and who don’t provide health insurance. Those excise taxes are not deductible as business expenses.
But the Patient-Centered Outcomes Trust Fund Fee is deductible as a business expense. For the typical small business with an HRA paying $1 or $2 toward this excise tax, the deduction won’t set their world on fire, but it’s small consolation for having to fill out all the paperwork just to send the government a $1 check. (Reference for deductibility of the Trust Fund Fee: see IRS Chief Council Memorandum AM2013-02.)