Surtax on Americans living and working overseas will end with reforms to the Affordable Care Act.
In the House Republican’s announcement of March 6, 2017 regarding changes to the Affordable Care Act, the new legislation calls for the repeal of the 3.8% surtax on net investment income (NIIT) beginning in 2018.
ACA has long argued that the imposition of this surtax on Americans living and working overseas, who are unable to apply for, or take advantage of, the Health Care Exchanges, represented unfair double taxation since foreign tax credits were not allowed to offset this tax.
ACA advocated to the Treasury Department, the Americans Abroad Caucus and Members of Congress, requesting that a change to the regulations be introduced that would exclude the imposition of this tax, or allow foreign tax credits against this tax, for Americans legally resident overseas.
The reform of the Affordable Care Act would correct this problem for Americans living and working overseas and, therefore, ACA strongly supports this change to the law.