PSA: Article about ObamaCare (ACA) on 16 February 2017. I.R.S. will not enforce penalties on 2016 tax returns for no coverage

[Lanny]

I read this article, twice, and U.S. English is my native language. It looks like if someone files their Federal Form 1040 for the 2016 tax year, and does not indicate whether or not they have Health Insurance, that the I.R.S. will accept the return and will not assess a Penalty for not having Health Insurance. 

 

The 2 participants in the Video on that page were very partisan, but the Text, regarding Tax Enforcement, or, the lack of Tax Enforcement, is quite interesting and might help someone who is preparing their 2016 return and did not have Health Insurance during 2016.

 

http://www.foxnews.com/politics/2017/02/16/obamacare-in-death-spiral-aetna-ceo-says.html

 

ETA: Correction in tax year in thread title, from 2015 tax year. I changed that to 2016 tax year

Edited February 16, 2017 by Lanny

[mom@shiloh]

This will be good news for my ds and his wife.  They couldn't afford to pay for coverage under the "affordable" care act and they also couldn't afford the penalties.

[Lanny]

This will be good news for my ds and his wife.  They couldn't afford to pay for coverage under the "affordable" care act and they also couldn't afford the penalties.W

 

Wonderful!   I am glad to hear that. I just received the following, in an email from FreeTaxUSA.com

 

The IRS is now processing refunds for all types of tax returns. To get the fastest refund possible use e-file and direct deposit on FreeTaxUSA.

 

This year the IRS was required by a new law to hold refunds claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) until February 15th. They are now ready to process all refunds using their normal cycle.   

[hjffkj]

That's good to know because I just got something from the state saying my son was not covered for multiple months this year. Thanks for telling me during the year. That explains the darn lab bill I got for him. Now I don't have to spend hours on the phone trying to figure out why he had no coverage when the rest of us did.

[VaKim]

Well crap. Sure wish I'd waited to file ours. 

[Lanny]

Well crap. Sure wish I'd waited to file ours. 

 

File an Amended Return immediately.

[VaKim]

File an Amended Return immediately.

Too late now, Lanny. We've already gotten our state refund and the federal has already been accepted. Thanks for the suggestion though. 

[Lanny]

Too late now, Lanny. We've already gotten our state refund and the federal has already been accepted. Thanks for the suggestion though. 

 

File an Amended Federal Return...

[MomatHWTK]

At this point in time, it is not clear that individuals who owe the penalty won't eventually be asked to pay. The change merely means (for now) that the IRS won't reject those filings. 

 

Details:

"The IRS noted Wednesday that tax filers remain responsible for any Obamacare penalty they owe. It also said that taxpayers who don't disclose their insurance status could end up getting questioned by the agency."

 

http://www.cnbc.com/2017/02/15/irs-wont-reject-tax-returns-if-they-do-not-include-obamacare-disclosures.html

 

I would suspect that to negate the debt altogether would require legislative action that removed the penalty retroactively. 

[Lady Marmalade]

Shoot.

 

I was going to wait to file this year, but everything I read said the penalty was still going to be enforced this year, so I went ahead and filed.  We ended up owing federal taxes because of the penalty, but I have not paid those yet.  We did receive a small refund from the state though.

 

I did my taxes through taxact.  I've never amended a tax return before... It would be wonderful if that payment I owe could be reversed to a nice refund!

 

ETA: I think I'll wait on doing anything yet.  That article wasn't really clear on potential ramifications.  But I'll be keeping an eye on it.  Thanks for the heads up!

Edited February 17, 2017 by Lady Marmalade

[Farrar]

Can someone clarify for me... I'm mostly just curious as it doesn't personally affect us... someone told me that they already weren't enforcing the penalty. Like, they asked for it, people paid it, but if you didn't pay it, no one actually came looking for it. But I don't know if that's true or not.

Edited February 17, 2017 by Farrar

[Lanny]

Shoot.

 

I was going to wait to file this year, but everything I read said the penalty was still going to be enforced this year, so I went ahead and filed.  We ended up owing federal taxes because of the penalty, but I have not paid those yet.  We did receive a small refund from the state though.

 

I did my taxes through taxact.  I've never amended a tax return before... It would be wonderful if that payment I owe could be reversed to a nice refund!

 

ETA: I think I'll wait on doing anything yet.  That article wasn't really clear on potential ramifications.  But I'll be keeping an eye on it.  Thanks for the heads up!

 

You are welcome.  I used TaxAct for years, until they raised the cost of the Premium service for filing my 2015 return so much that I found another provider.

 

Suggestion: Contact TaxAct Support and ask them what they suggest. 

[HelenNotOfTroy]

There are many ways to not have to pay the penalty, both through the marketplace and through the IRS. I would make sure I didn't fit into any of those categories before I just didn't answer the question of the tax form.