For the first time, the Internal Revenue Service (IRS) will block any tax returns next year that omit information on healthcare coverage, a requirement thanks to Obamacare.
The IRS released news to tax professionals that for the upcoming 2018 filing season, it will not accept tax returns filed by paper or electronically that don’t answer questions about healthcare coverage for 2017 – mandated by the Affordable Care Act.
To avoid the IRS from stalling their tax returns and holding up refunds, taxpayers have to indicate whether they and everyone in their household had healthcare coverage and, if not, whether they qualified for an exemption from the Obamacare coverage requirement or are paying the penalty.
The penalty is steep. Americans without coverage in 2017 can expect to pay the higher of 2.5 percent of their adjusted gross household income or $695 per adult and $347.50 per child under age 18.
This is an interesting move and the timing is not coincidental. Congress and the Trump Administration is trying to repeal and replace Obamacare with truly affordable healthcare options based on competition and choice for customers. Yet, for the first time that the IRS will not accept tax returns that omits this information.
The IRS is reversing its position from this year when they accepted and processed tax returns even when the taxpayer didn’t disclose whether they have healthcare coverage.
The IRS has been obligated to enforce the law in 2017, but chose not to do so. Instead they said of their reversal that "[t]his process reflects the requirements of the ACA and the IRS’s obligation to administer the health care law." What has changed? Perhaps the political environment.
The individual mandate is an unpopular provision that two out of three Americans opposed earlier this year. As the IRS enforces this provision and begins holding taxpayers’ returns hostage, we can expect even more Americans to clamor for change.
If Obamacare was truly affordable, government bureaucrats wouldn’t have to force people to purchase it.
It’s important that Congress follows through on eliminating this provision, which is propping up the Affordable Care Act, as well as the rest of this failing healthcare experiment. Women and families want healthcare they can actually afford and afford to use. That will come through market competition not government mandate.