Tuesday, August 14, 2018

AHCA Disappointed with Proposed Tax Rule

Drew Thies

The American Health Care Association (AHCA) expressed disappointment last week concerning an Internal Revenue Service (IRS) proposed rule relating to the tax status of skilled nursing providers.

The proposed rule stipulates that skilled nursing facilities (SNFs) cannot take advantage of some of the tax deductions in the 2017 tax law because of their status as "specified service trade or businesses.”

The Trump administration’s signature tax law allows passthrough entities like limited liability corporations, partnerships, S corporations, and sole proprietors to deduct 20% of their "qualified business income” but only if they are not a specified service business.

AHCA CEO and President Mark Parkinson said “[t]he rule is inconsistent with Congressional intent” and that [t]he intent of the law was to provide tax cuts to job creators and those willing to put capital into the economy.”

AHCA will “submit comments and will forcefully advocate our position” and “go to the Hill and seek legislative relief” if necessary, Parkinson continued.

The rule is part of the regular notice of proposed rulemaking (NPRM) process, is not final, and will become law after stakeholders weigh-in and the IRS codifies it. Comments are due by October 1st.

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