The Tax Cuts and Jobs Act changes the individual insurance mandate, the rules regarding the shared responsibility payment which has required individuals to obtain minimum essential health coverage or otherwise pay a penalty.

Current Law

Through December 31, 2018

Individuals and any of their dependents are required to obtain minimum essential health coverage for the month; otherwise they will pay a monthly shared responsibility payment (penalty). This is reported on Form 1040. Certain individuals may qualify for an exemption from the penalty. This tax law is in effect through December 31, 2018.

New Law

Effective for tax years beginning after December 31, 2018

The shared responsibility payment (penalty) is eliminated by reducing the percentage by which the excess of the taxpayer’s household income over the taxpayer’s applicable filing threshold is multiplied by zero and setting the applicable dollar amount to zero.

Commentary

The net result of these changes is that no shared responsibility payment (penalty) will be required after 2018, nor will there be any penalty imposed for failing to maintain minimum essential coverage. However, note that the 2017 Tax Cuts and Jobs Act does not appear to remove the employer mandate to provide health insurance to employees if the employer is an Applicable Large Employer (50 or more Full Time Equivalent Employees).

Print Friendly, PDF & Email
Curt Bach
Curt Bach
I joined Hawkins Ash CPAs in August 2010, and am currently a manager in the firm’s Medford office. I provide a variety of tax services, including trust and estate tax preparation and planning. I have more than nine years of experience providing audit and tax services to nonprofit organizations, governmental entities and small businesses. I am a member of our firm’s tax committee and not-for-profit service group.

Your Name (required)

Your Email (required)

Your Message

Are you human?


T: 800.658.9077
E: info@hawkinsashcpas.com

Locations

Your Name (required)

Your Email (required)

Your Message

Are you human?


T: 800.658.9077
E: info@hawkinsashcpas.com

Locations