ACA

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Quote:What’s the status of the penalty? Has it been repealed?

There has been considerable confusion about the status of the penalty. So to clarify, the penalty was repealed as part of the GOP tax bill that was signed into law in late 2017, but the repeal doesn’t take effect until 2019. People who were uninsured in 2017 will still face a penalty when they file their taxes in early 2018, and people who are uninsured in 2018 will still face a penalty when they file their taxes in early 2019. But people who are uninsured in 2019 and beyond will not be subject to a penalty.

How is penalty enforcement handled?

Tax returns now include a question about whether you had health insurance in force throughout the year. In many cases, employers, insurance companies, and the exchanges report this data directly to the IRS, but each tax filer has to answer the question each year. The question appears on 2017 tax returns (question 61 on the 1040), just as it did for 2014 through 2016; nothing has changed about that under the Trump Administration.

And enforcement is actually a little more strict for 2017 tax returns than it has been in previous years. For the first time, the IRS is not accepting returns if the filer leaves the question about health insurance blank. So while you could just skip the health insurance question altogether in prior years, that’s no longer an option. And lying to the IRS is considered fraud, so filers will need to truthfully state whether or not they had coverage in 2017.

For most unpaid taxes, there are a variety of ways that the IRS can recoup their money. But the text of the ACA is very clear in stating that taxpayers who don’t pay their ACA penalty are not subject to levies, liens, or criminal prosecution.



The only way that the IRS can collect the ACA penalty is if you pay it voluntarily, or if you’re owed a refund. In the latter case, the IRS deducts the penalty from your refund. Roughly 73 percent of tax filers received a refund in 2017, averaging nearly $3,000.

Source: https://www.healthinsurance.org/faqs/ive-heard-that-the-government-wont-really-be-able-to-enforce-the-penalty-for-not-having-health-insurance-is-this-true/