IRS Reminder: The Individual Mandate and 2016 Income Tax Returns
Information on Filing, Exemptions, and Potential Payment
With the 2016 federal income tax filing season approaching, the IRS is reminding individual taxpayers of the “individual mandate” (also called individual shared responsibility) provision of the Affordable Care Act, which requires every individual to have minimum essential coverage (MEC) for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return. Federal tax returns that do not reflect at least one of these three options will be rejected if the return is filed electronically.
Exemptions from the Individual Mandate
Individuals that do not have MEC but that meet certain criteria may be eligible for an exemption from coverage, most of which are claimed when filing tax returns; however, some must be claimed through the Health Insurance Marketplace. If an individual or any of his or her dependents are exempt from the requirement to have health coverage, he or she will complete IRS Form 8965, Health Coverage Exemptions, and submit it with his or her tax return. If, however, an individual is not required to file a tax return, he or she does not need to file a return solely to report coverage or to claim an exemption.
Individual Shared Responsibility Payment
For any months the individual or anyone on his or her return does not have coverage or qualify for a coverage exemption, an individual shared responsibility payment must be made. Calculation of the payment is made using a worksheet included in the Instructions for Form 8965; an individual will then enter the payment amount on his or her tax return.
Additional Information
Individuals can determine whether they are eligible for a coverage exemption or are responsible for a payment by using the IRS Interactive Tax Assistant. The IRS also offers Q&As on the individual mandate.
