A recent executive order signed by President Trump directs federal agencies to reduce potential burden on taxpayers. The IRS will now allow tax returns to be accepted for processing even if a taxpayer doesn’t indicate his or her health coverage status.
The penalty, officially known as the individual shared responsibility payment, is assessed for any month a taxpayer, their spouse, or dependents didn't have health coverage and is calculated in two different ways: by percentage of income and per adult and child. For 2016 the payment is $695 per adult and $347.50 per child under 18, up to a maximum of $2,085.
While these penalties technically still exist for any taxpayer that is uninsured, the IRS will not reject a return because the box on line 61 is unchecked. Although the IRS can contact a taxpayer with questions about the blank fields, the penalty cannot be enforced through jail time, liens or other collection activity. The only method the IRS used to collect this penalty was by withholding money from a taxpayer’s refund if one was due.
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