In what looks to be the first real blow to Obamacare before its inevitable death, the IRS is following President Donald Trump’s directive to ease up on the Affordable Care Act’s requirement that everyone have health care or pay a penalty.
The ACA requires most people to have health coverage, and to indicate whether they did by filling out line 61 of their 1040 forms when they file taxes. Following the president’s executive order last month which directed federal agencies to exercise authority and discretion available to them to reduce potential burden,” the IRS said in a statement to Yahoo Finance, it will allow electronic and paper tax returns to be accepted for processing in cases where a taxpayer doesn’t indicate their coverage status.
Since Obamacare’s implementation, individual taxpayers had to indicate whether they had health insurance, an exemption from coverage or made a “shared responsibility payment” (the fee for going without minimum health coverage) — in line 61 of Form 1040. An IRS spokesperson said that in recent years, tax returns that were “silent” in that regard were still processed. Last year, though, the agency initially put in place system changes for the 2016 tax year that would reject tax returns during processing when the taxpayer didn’t provide that information.