IRS Plans to Reject 2017 Income Tax Returns without Health Care Information Reported

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The Internal Revenue Service has stated that it will not accept electronically filed 2017 tax returns that do not report on the taxpayer’s compliance with the individual mandate provisions of the Affordable Care Act (ACA). The announcement notes that they will not accept the electronic tax return filing until the taxpayer indicates whether they had coverage, had qualified for an exemption from the coverage requirement or will make a shared responsibility payment. In addition, returns filed on paper that do not address the health coverage requirements may be suspended pending the receipt of additional information and any refunds associated with those returns may be delayed.

Though the information was require on 2016 income tax returns, the Internal Revenue Service did not reject such returns for that year after President Trump issued an executive order that directed federal agencies to waive, defer, or delay the implementation of ACA provisions that imposed penalties or fees.

The Tax Cuts and Jobs Act signed into law on December 22, 2017 reduces the amount of the penalty, or Shared Responsibility Payment (SRP), to zero for months beginning after 12/31/18, but for 2017, the Internal Revenue Service says that it will not consider an electronically filed tax return complete and accurate if the taxpayer does not report full-year coverage, claim an exemption, or report an SRP on the return.

Questions and comments can be sent to Bob Grossman or Don Johnston