Protective Claim for Refund of Net Investment Income Tax
In Mar. 2020, the U.S. Supreme Court announced it will hear a case challenging the constitutionality of the individual mandate under the Affordable Care Act (ACA). While the court’s decision isn’t expected until the first half of 2021, in the meantime there is uncertainty as to whether the 3.8% net investment income tax (NIIT) could be impacted if the ACA is considered unconstitutional. While the NIIT wasn’t enacted as part of the ACA in 2017, it falls under the statute of limitations for refund claims. If the court votes the mandate as unconstitutional, the Supreme Court will then decide if the NIIT could be made retroactive to 2016.
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