The IRS issued a word of caution last week. Despite Republican efforts to repeal the individual mandate, it’s still the law and they are enforcing it. They will automatically reject 2017 tax returns if taxpayers skip the health care question. In prior years, the IRS continued to process the returns even though millions skipped the question.
Given this change, there are a couple of actions employers should consider taking. While you’re in the midst of open enrollment season, issue a reminder that the individual mandate is still the law and employees may be subject to a penalty if they don’t have minimum essential coverage in 2018. When you send employees their 2017 Form 1095 in January, remind them why you are sending the form and let them know the IRS may reject their tax return if they skip the health care question. For those that don’t closely follow what’s happening in DC, these reminders may save some headaches and perhaps even a tax penalty.
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