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Medical Devices / Regulatory Affairs / Commercial Operations

IRS Decides Not to Impose Penalties on Medical Device Excise Tax through Q4 2018

Jan. 22, 2018
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The U.S. Internal Revenue Service and the Department of Treasury will not impose penalties on devicemakers liable for the Affordable Care Act’s medical device excise tax until Q4 2018.

The unpopular 2.3 percent excise tax, enacted in 2013 as a mechanism to pay for ACA provisions, received a two-year moratorium under the Consolidated Appropriations Act of 2016.

The temporary suspension was lifted and the tax came back into effect Jan. 1, to the dismay of many U.S. producers who say it hinders innovation efforts and job creation.

Prior to the joint decision to provide deposit penalty relief, devicemakers were given only a couple of weeks to prepare to make the excise tax payments for certain medical devices by Jan. 29, with the first deposit covering the first 15 days of the month.

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