New IRS 1040 Requirement Shows ACA Reporting Is Very Much Alive


A recent move by the IRS to reject 1040 forms that don’t properly indicate taxpayers’ health-insurance status shows that the Affordable Care Act is both still in effect and relevant to tax reporting.


After a summer of attempts to repeal the ACA, the law survived, as did the tax information reporting requirements it carries.  Now, the IRS has revealed that it will not accept electronically submitted 1040 forms that do not indicate whether a taxpayer received health coverage. The indicator of health coverage on the 1040 is an ACA requirement.


The requirement to indicate medical coverage was in place for tax year 2016, but the IRS suspended it in January 2017. For TY2017, however, the requirement is in place to stay. Taxpayers must indicate whether they had health coverage, had an exemption to carrying coverage or will pay a penalty for not having coverage.


The latest move from the IRS is another indicator that the ACA and the requirements it presents for both taxpayers and organizations are very much in play. In addition, the IRS is giving teeth to the penalties it charges organizations for non-compliance in ACA reporting.


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About the Author

Gerry  Nelligan

Gerry Nelligan is a Regulatory Analysis Supervisor at Sovos, leading a team of counsels covering information reporting, including 10-Series IRS reporting, Affordable Care Act (ACA) reporting and Automatic Exchange of Information (AEOI). Gerry received his J.D. from Suffolk University Law School and his B.A. from Providence College. He is a licensed attorney in the state of Massachusetts.

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