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IRS Demands Proof of Health Insurance

2018 tax forms require filers to indicate coverage

spinner image IRS no longer accepting electronic tax filings without proof of health insurance
New guidelines will require taxpayers to address their health insurance status when filing taxes in 2018.
John Kuczala/Getty Images

The Internal Revenue Service won’t process individual tax returns in 2018 unless taxpayers indicate whether they have health insurance coverage or an exemption.

The move, announced last month, reverses course from this year, when the IRS said it would not require filers to indicate on 1040 tax forms whether they had health insurance. Filers were still required to have medical insurance or pay a penalty, but the IRS accepted and processed returns even if taxpayers didn’t indicate coverage status.

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Here’s the IRS statement on the change for 2018, which will require filers to check off a line on their tax forms:

“‎To avoid refund and processing delays when filing 2017 tax returns in 2018, taxpayers should indicate whether they and everyone on their return had coverage, qualified for an exemption from the coverage requirement or are making an individual shared responsibility payment,” the IRS statement said. “This process reflects the requirements of the ACA [Affordable Care Act] and the IRS’s obligation to administer the health care law.”

The change makes 2018 the first time the IRS will not accept tax returns that omit this information.

What’s behind the latest move?

IRS spokesman Bruce Friedland said it followed a review of IRS procedures.

“The IRS has determined that ‎it is more burdensome for taxpayers to allow them to file an incomplete tax return and then have to manage follow-up letters and potentially amend their return,’’ Friedland said. “Identifying omissions and requiring taxpayers to provide health coverage information at the point of filing makes it easier for the taxpayer to successfully file a tax return and minimizes related refund delays.”

In September, the IRS started sending letters to about 130,000 taxpayers who didn’t address the health care requirement on 2014 and 2015 tax returns.

The ACA requires U.S. citizens and permanent residents to have health insurance coverage or pay a penalty. For 2017, that’s the higher of 2.5 percent of adjusted gross income or $695 per adult and $347.50 for each child under 18 with a family maximum of $2,085. There are exemptions from the mandate, including the lack of access to affordable health coverage, filing for bankruptcy and the death of a family member.

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