IRS complies with President Trump’s Executive Order -- will not reject tax returns without health care disclosure

02-20-2017Tax Information

After President Donald Trump issued an Executive Order, the IRS announced that it will not reject tax returns just because a taxpayer has not indicated on the return whether the taxpayer had health insurance, was exempt, or made a shared-responsibility payment under Sec. 5000A of the Patient Protection and Affordable Care Act (PPACA).

  • The PPACA requires taxpayers who do not maintain minimum essential health coverage for each month of the year and who do not qualify for an exemption to pay a shared-responsibility payment with the filing of their Form 1040, U.S. Individual Income Tax Return.
  • Although the health insurance information requirement has been in effect for a few years, the IRS accepted returns that did not contain the information
  • For 2016 returns, IRS initiated systems to reject returns that did not provide the information.
  • After President Trump’s executive order, the IRS has suspended the practice.
  • The IRS also says it is studying the executive order to determine what other action it must take to comply.
  • As the IRS pointed out, the requirement for taxpayers to make shared-responsibility payments under PPACA if they do not have health insurance or an exemption is statutory and cannot be changed without legislation.
  • Therefore, until legislation repealing the requirement is enacted, taxpayers who do not have insurance or an exemption must pay the shared-responsibility payment.

The IRS disclosed the change on its webpage, ACA Information Center for Tax Professionals.

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