The IRS Will Reject Returns Without ACA Information
Tax season is coming up and will be here before we know it. Make sure you’re prepared to file to avoid getting hit with major late fees and penalties. Part of being prepared to file is staying up to date with tax news.
Every year the policies and requirements change and with the continuous efforts to repeal the Affordable Care Act major reforms could take place any day now. However, with ACA still intact the IRS has released a major announcement. They will not accept returns without health coverage information.
The IRS Refuses To Accept Returns Without Health Coverage
The IRS recently announced that in the 2018 tax filing season they will not accept returns that are filed electronically where the taxpayer fails to address the health coverage requirements under the Affordable Care Act. This is a new update, and this is the first time the IRS will refuse to accept this type of return.
You may have noticed that they specified ‘electronically filed returns’ and may think you can get away with paper filing without reporting on ACA requirements, but that’s not the case. Paper filed returns that neglect to mention ACA requirements may be suspended with delayed refunds until taxpayers can provide such information.
To have returns accepted on time taxpayers must clarify whether they had coverage, had an exemption, or if they will make a shared responsibility payment. This new process is put in place in order to reflect the requirements of the ACA and the IRS’s responsibility to administer the health care law.
During prior tax periods, the IRS didn’t prevent returns from being processed if the health care coverage box wasn’t checked but they were slowed down. Also, if taxpayers lacked coverage and didn’t receive an exemption they had to pay the individual shared responsibility payment.
ACA And Its Requirements
To help your business prepare for tax season we will go over the Affordable Care Act, which is the major healthcare reform to provide coverage to more individuals, constrain costs, and improve quality.
Under the ACA employer mandate employers with 50 or more workers will face a penalty if they neglect to offer coverage to all employees. They will also be penalized if the coverage they offer doesn’t meet the minimum value or affordability standards.
To meet the minimum coverage the health plan must be designed to pay at least 60% of the total cost of medical services for a standard population. It must also have benefits that include the substantial coverage of physician and inpatient hospital services.
If you qualify for an exemption such as the general hardship exemption, the short coverage gap exemption, and more, they aren’t automatically granted. You must apply for an exemption in advance and if approved must be reported. If your exemption is approved you will receive an Exemption Certificate Number or ECN to list on your return.
Be Prepared To File
You can file your ACA forms with the help of ExpressTaxFilings. Simply follow the step-by-step instructions to enter the health coverage information for all of your employees.
Or you can head to our sister company, ACAwise for full-service ACA e-filing. ACAwise does all of the complicated work for you, so you can instantly complete your forms!
Both ExpressTaxFilings and ACAwise offer postal mailing. You can have us print copies of recipient’s ACA forms and mail them out for you! Plus, we offer live, US-based customer support! If you need any assistance please don’t hesitate to contact an ACA expert at ExpressTaxfilings or ACAwise!
