IRS provides insurance-related guidance
The Internal Revenue Service posted three revenue procedures Monday of special interest to the insurance industry.
Rev. Proc. 2019-29 deals with the premium tax credit that can be claimed by taxpayers under the Affordable Care Act to help pay for health insurance coverage. It provides indexing adjustments required by statute for certain provisions under section 36B of the Tax Code. The revenue procedure updates the applicable percentage table used to calculate an individual’s premium tax credit for taxable years starting in calendar year 2020 and updates the required contribution percentage for plan years beginning after calendar year 2019.
Revenue Procedure 2019-30 provides simplified procedures for an insurance company to obtain automatic consent from the IRS to change its methods of accounting for discounting unpaid losses and expenses unpaid, in accordance with the Tax Cuts and Jobs Act for taxable years starting after Dec. 31, 2017, and ending on or before Dec. 31, 2019.
Revenue Procedure 2019-31 pertains to accident insurance and gives the revised discount factors for the 2018 accident year for insurance companies, along with the discount factors for the 2019 accident year. The discount factors will be used to compute discounted unpaid losses under section 846 of the Tax Code and discounted estimated salvage recoverable under Section 832, as amended under the Tax Cuts and Jobs Act.