In response to President Trump’s executive order regarding Obamacare, the IRS won’t reject tax returns without health insurance declarations this year.
Trump issues executive order
The 2016 tax season was supposed to be the first year that the IRS automatically rejected tax returns that omitted health insurance coverage. However, the Trump administration is taking actions to repeal or at least, lessen the influence of Obamacare. In an attempt to do that, President Trump issued an executive order to “waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden” on taxpayers.
Trump signed the executive order, Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal, on January 20, 2017.
Trump’s executive order did not repeal the Affordable Care Act. However, it directed agencies on how they should implement the law. Congress is the only governmental body that can change or repeal the law.
The law still states that tax payers must have health coverage or pay a fine. The IRS is still responsible to hold tax payers accountable to have health care coverage.
IRS changes returns policy
The IRS was planning to systematically reject any tax returns that omitted health insurance coverage starting this year. However, on February 6 the IRS removed those initiatives to comply with the executive order.
This means that tax payers can submit tax returns without declaring if they have insurance. The IRS calls returns without health insurance status silent returns.
IRS recommendations regarding Obamacare
The IRS recommends that taxpayers state their insurance coverage on tax returns. This will help the IRS process refunds quickly. It will also help tax payers avoid further scrutiny.