The highly talked about tax reform bill, called the Tax Cuts and Jobs Act, was passed on December 20, 2017 in the Senate and House of Representatives and is expected to be signed into law by President Trump shortly. The bill brings important changes to the federal tax code, with one of the major changes coming in the elimination of the individual mandate penalty in 2019.
What is the individual mandate?
The individual mandate was put into place in 2014, requiring most individuals to obtain acceptable health insurance coverage for themselves and their family members or pay a penalty. Based on information from individuals filing tax returns and checking whether or not they had coverage, the IRS assesses a penalty for each nonexempt family member without coverage.
How to proceed:
Although the tax reform bill will eliminate the individual mandate penalty, this repeal will not take effect until 2019. Individuals should continue to comply with the mandate as they have in previous years through the duration of the 2017 and 2018 tax return periods.
These individuals should indicate on their tax returns whether they:
- Had health coverage for the year
- Qualified for an exemption from the individual mandate; or
- Will pay an individual mandate penalty
If you are looking for individual or group health insurance or have any questions regarding the effects of the tax reform bill being passed or the elimination of the individual mandate penalty in 2019 – feel free to Contact Us !