Individual Mandate’s Tax Filing

Individual Mandate

There is still a lot of confusion about the tax requirements under the Affordable Care Act’s individual mandate, largely because Americans have received mixed messages about what the rules are.

pexels-photo-129112On day one of his administration President Trump signed an executive order instructing federal regulators to take steps to ease the financial burdens of Obamacare, and the IRS responded by saying that the agency would not automatically reject 2016 tax returns that fail to answer the question about whether theAffordable-Care-Act individual or family had minimum essential coverage. We’ve also heard Republican lawmakers on cable news stations saying that they will soon be repealing Obamacare and eliminating the individual mandate. In the American Health Care Act, they tried to do just that: the AHCA would have reduced the ACA’s individual shared responsibility penalties to $0 beginning January 1, 2016.

Of course, the AHCA failed to make it out of the House of Representatives, so the penalties under the individual mandate remain in effect, and the IRS announcement that it won’t reject tax returns that fail to answer the shared responsibility question doesn’t mean that people don’t owe any applicable penalty. For now, the ACA is still the law of the land, people are still required to have health coverage, and they will have to pay an excise tax if they go without health insurance and don’t qualify for an exemption.