By George Jones and George L. Yaksick, Jr.
The Tax Cuts and Jobs Act (H.R. 1) was signed by President Trump on December 22, 2017. The Senate approved the bill, 51 to 48, a little after midnight on December 20, 2017. The House re-voted the same day, passing the bill, 224 to 201. The President’s signing of P.L. 115-97 set in motion a flurry of activity by the Internal Revenue Service (IRS), especially to update withholding guidance for 2018.
Individual mandate. The law effectively repeals the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) individual mandate by making any required payment $0. The Conference bill follows the Senate bill in making this provision effective with respect to health coverage status for months beginning after December 31, 2018. The conference committee did not address other ACA taxes, such as the medical device excise tax and the excise tax on high-dollar health plans ("Cadillac" tax). Separate legislation has been introduced in Congress to extend the current suspensions of those ACA taxes, along with the health insurance provider fee.
The IRS has cautioned that, under current law, for tax year 2017, it will not consider a return complete and accurate if the taxpayer does not report full-year coverage, claim a coverage exemption, or report a shared responsibility payment on the return.
Revote. The House voted as expected on December 19 to approve H.R. 1. However, the Senate parliamentarian announced that several provisions violated the reconciliation rules (the so-called "Byrd rule"). The Senate GOP removed the offending language and the Senate approved the bill along party lines, with Sen. John McCain (R-Ariz) not voting. The bill returned to the House for a revote, where again it passed.
Briefing available. For more details about the newly enacted tax bill, see the special tax briefing, Congress Approves Sweeping Tax Overhaul, available here.
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