Questions and Answers on the Individual Shared Responsibility Provision

Questions and Answers on the Individual Shared Responsibility Provision

The IRS Informs taxpayers that it’s taking the Affordable Care Act individual health insurance mandate penalty, out of the income tax forms for TY 2019. https://www.irs.gov/affordable-care-act/questions-and-answers-on-the-individual-shared-responsibility-provision

Major Takeaway:  Form 1040 for 2019 does not have the “Full-year health care coverage or exempt” box.

Enacted in December 2017, the Tax Cuts and Jobs Act (TCJA) reduced the shared responsibility payment to zero for tax year 2019 and all subsequent years. Taxpayers are still required by law to have minimum essential coverage or qualify for a coverage exemption. However, under the TCJA, taxpayers no longer need to either make a shared responsibility payment or file Form 8965 with your tax return if you don’t have minimum essential coverage for part or all of 2019.

Reporting Tip:  While the federal government is now relaxed its IRS requirement for reporting concerning the individual mandate; many states have now picked up individual mandate reporting requirements. This is true for many states including New Jersey and District of Columbia, which require employees to report evidence of coverage on their state or local tax returns. For more information: Employer Obligations Under State Individual Health Care Mandates

One last point: For Jan. 1, 2019 and beyond, taxpayers are still required by law to have minimum essential coverage or qualify for a coverage exemption but there is no reporting necessary on behalf of the individual. The IRS still requires a report of coverage for individual taxpayers be sent to the IRS system known as IRSAIR; consequently, the IRS will know who has coverage and does not.

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