Late Monday night, draft legislation was released to repeal and replace portions of the Affordable Care Act. Much will be discussed regarding the healthcare implications of the legislation, but the draft also includes a number of non-healthcare related income tax changes. Arguably the most significant is the repeal of the often-criticized 3.8 percent net investment income tax (NIIT). The repeal of the NIIT would reduce the maximum rate of tax on certain capital gains and dividends from 23.8 percent to 20.0 percent. The additional 0.9 percent Medicare tax would also be repealed under the proposed legislation. The targeted provisions are proposed to be repealed beginning in 2018.
The legislation is an initial draft that still must undergo standard legislative processes such as budget scoring, markup, and debate.
Stay tuned for further updates on how these changes may affect your business.