| What will be the impact of the The Patient Protection and Affordable Care Act (“Act”) on Individual Income Tax Rates in 2013?
The Patient Protection and Affordable Care Act (“Act”) was signed into law by President Obama on March 23, 2010. Individuals and fiduciaries should be aware of the Act’s Unearned Income Medicare Contribution that takes the form of a surtax of 3.8% on certain types of unearned income of individuals, trusts and estates with income above specific thresholds.
With this new law, the top income tax rates are set to increase in 2013. As a result, the future top income tax rate of 39.6% would potentially increase to 43.4% due to the surtax. Furthermore, in addition to ordinary income tax rate increase, the top capital gain rate is also expected to increase to 20 percent in 2013.
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