The Affordable Care Act has been a hot topic in Washington this year. We’ve followed months of debates and negotiations over whether to repeal and replace it. We’ve seen heated protests and town hall meetings across the country both for and against the ACA. Despite all of this activity, as the year draws to a close, the ACA is still the law.
The ACA, which requires most Americans to buy health insurance, means that come tax season, ACA reporting is still required.
New rules for individuals filing tax returns
In contrast to last year, the IRS is no longer accepting “silent returns”. A silent return is a tax return in which an individual:
- Leaves the checkbox for Full-Year Coverage blank and
- Fails to include
- Form 8962 (to figure and reconcile a premium tax credit) or
- Form 8965 (to claim a coverage exemption)
In other words, in order for the IRS to accept your 2017 tax return, you must do one of the following:
- Indicate that you had qualifying healthcare coverage in 2017 (known as “minimum essential coverage”)
- Pay a penalty for not being insured (Note: you do not have to pay this penalty if you were uninsured for only two months or less)
- Show that you qualified for an exemption from healthcare coverage.
There are a variety of circumstances that could qualify you for an exemption from health insurance. For example, if you experienced certain hardships (such as bankruptcy, disaster or incarceration) or if you are a member of a certain group (such as a Federally-recognized Indian tribe or a health care sharing ministry), you could qualify for an exemption.
Understanding the tax regulations surrounding the ACA will help you avoid mistakes on your return.