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ACA update: IRS now requiring health care info on individual tax returns

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The IRS recently announced it would not accept individual tax returns electronically filed if the taxpayer does not complete the health care reporting section on the tax form established under the ACA’s individual mandate.

This will be the first year the IRS will not accept returns with health care information omitted, and the announcement states explicitly that taxpayers must indicate whether they and all other individuals on the return:

  • had minimum essential coverage for each month of the year, OR
  • qualified for an exemption, OR
  • will make an individual shared responsibility payment as calculated on the return.

What does this mean for individuals?

The IRS asserts this is generally a positive change for taxpayers in that individuals are more likely to receive refunds more quickly.

What does this mean for employers?

Employers should expect questions from employees about their 1095 forms during tax season because tax preparers will request documentation of individuals’ coverage. It seems unlikely the January 31 due date for furnishing 1095 forms to employees will be delayed as it has been in previous years.

Despite much talk of change, the IRS October 2017 announcement reminds us the ACA is still the law of the land and employers and employees should prepare for this year’s filing requirements accordingly.

To view the IRS announcement, click here.