Individual Mandate and Income Tax Returns

Posted by BAS - 19 October, 2017

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The individual mandate provisions of the Affordable Care Act require every taxpayer to (a) have qualifying health coverage; (b) qualify for an exemption from having health coverage; or (c) pay a tax penalty. Individuals use their 1040 tax returns to identify their individual mandate health coverage status to the government.  All individuals must check a box on the 1040 to indicate compliance with the indivdiual mandate.

The IRS accepted 2016 tax returns (filed in 2017) that did not indicate compliance with the ACA individual mandate. This was based on an Executive Order which directed federal agencies to use discretion in enforcing ACA provisions.

The IRS announced recently that for the 2018 filing season, it will not accept electronically filed tax returns where the taxpayer does not address the health coverage requirements of the ACA. Each individual will have to select the appropriate box on the 1040 to indicate coverage, show an exemption from the requirement to be covered, or pay the penalty.

Topics: Health Care Reform (ACA), Taxes


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