Pursuant to the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, refund payments issued to, and credit elect and refund offset transactions for certain small tax-exempt employers claiming the refundable portion of the Small Business Health Care Tax Credit under Internal Revenue Code Section 45R, are subject to sequestration. This process is based on when the IRS processes the refund payment, credit elect and/or refund offset, not on when the original or amended tax return is received. Refund payments, credit elect, and refund offset transactions processed on or after October 1, 2020, and on or before September 30, 2031, will be reduced by the 5.7% sequestration rate. The sequestration reduction rate will be applied unless and until a law is enacted that cancels or otherwise affects the sequester, at which time the sequestration reduction rate is subject to change. Affected taxpayers will be notified through correspondence that a portion of their requested payment was sequestered and the amount. Yearly sequestration rate reduction Fiscal year (October 1 thru September 30) Sequestration rate reduction 2021-2031 5.70% 2020 5.90% 2019 6.20% 2018 6.60% 2017 6.90% 2016 6.80% 2015 7.30% 2014 7.20% 2013 8.70%
