• PCORI Trust Fund Tax is Deductible
  • June 18, 2013 | Author: Jason P. Lacey
  • Law Firm: Foulston Siefkin LLP - Wichita Office
  • An internal IRS memorandum released this week provides informal guidance clarifying that the PCORI trust fund tax is generally deductible for income-tax purposes when paid by an insurer or the sponsor of a self-insured plan.

    By way of brief background, the PCORI trust fund tax is a $1 (increasing to $2) tax on the average number of covered lives under a health insurance policy or self-insured health plan. It funds the Patient Centered Outcomes Research Institute, which studies the comparative effectiveness of medical treatment options.

    Given the relatively small dollar amount of the tax when calculated for a single employer, the ability to deduct the tax will not make a huge difference. But it is a welcome clarification just the same.

    Reminder. For plans with plan years ending after October 1, 2012 and on or before December 31, 2012, the tax must be paid and a return filed by July 31, 2013. The IRS recently published drafts of the Form 720 and related instructions that must be used to pay the tax.