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IRS Does Not Extend Eased Tax Reporting Requirements: Taxpayers Must Report Whether They Had Health Coverage When Filing 2017 Taxes

October 20, 2017

By Kelly A. Brogan, Esquire

The IRS has announced that it will require all taxpayers to disclose their health coverage status when filing their 2017 tax returns in the 2018 tax filing season.

The move is a reversal of the policy adopted by the IRS for 2016 tax returns in response to a January 2017 executive order that directed federal agencies to reduce potential burdens on taxpayers because of the Affordable Care Act (ACA). In response to the order, the IRS adopted the position that it would not enforce the “individual shared responsibility” provision of the ACA for the 2017 tax filing season. For 2016 taxes, the IRS accepted and processed electronic and paper tax returns even where taxpayers did not indicate their health coverage status.

For 2018, however, the IRS has reversed its position. For the 2018 tax filing season (2017 tax returns), the IRS‎ will not accept electronic or paper tax returns where the taxpayer does not indicate his health coverage status as required by the ACA. The ACA’s “individual shared responsibility” provision requires taxpayers to indicate on their tax return whether they:

  • Have qualifying health coverage called minimum essential coverage;
  • Qualify for a health coverage exemption; or
  • Make a shared responsibility payment for the months that they did not have coverage or exemption.

This means that to avoid delays in the processing of tax returns or issuing of a refund, taxpayers must indicate their health coverage status on Line 61 of their form 1040 or on the corresponding line of a 1040EZ or other form when filing 2017 tax returns.

If you have questions about the impact of the Affordable Care Act, please contact any of the Employee Benefits attorneys at Willig, Williams & Davidson at (215) 656-3600.

   
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