IRS Provides Guidance On Liability For ACA’s Shared Responsibility Payment; FAQs Provided

The Internal Revenue Service has issued proposed regulations relating to the requirement to maintain minimum essential coverage enacted by the Patient Protection and Affordable Care Act (ACA). In addition to the proposed regulations, the IRS has issued a set of frequently asked questions, which addresses basic information regarding the individual shared responsibility provision, who is affected by the provision, minimum essential coverage, exemptions, and reporting coverage or exemptions from making payments.

Code Secs. 5000A(a) and 5000A(b) provide that nonexempt individuals must have minimum essential coverage for each month beginning after Dec. 31, 2013, or make an additional payment (the shared responsibility payment) with their income tax return for the tax year that includes that month. A taxpayer is liable for the shared responsibility payment if any nonexempt individual who may be claimed by the taxpayer as a dependent for a tax year does not have minimum essential coverage in a month included in that tax year. Married taxpayers filing a joint return for any tax year are jointly liable for any shared responsibility payment imposed for the year.

The proposed regulations address: (1) maintenance of minimum essential coverage and liability for the shared responsibility payment: (2) minimum essential coverage; (3) exempt individuals; (4) computation of the shared responsibility payment; and (5) inclusion of payment with a tax return and assessment and collection. The proposed regulations apply for months beginning after Dec. 31, 2013.

Comments requested. Comments must be received by May 2, and may be submitted electronically at http://www.regulations.gov; or mailed to CC:PA:LPD:PR (REG-148500-12), Room 5203, Internal Revenue Service, PO Box 7604, Ben Franklin Station, Washington, D.C. 20044.

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