In a court case: Texas vs. U.S. the Affordable Care Act individual mandate was ruled unconstitutional. There's a lot more to the decision, and it is far from final, but, if upheld, ACA penalties paid could be gotten back.
Here's the rub: The statute of limitations for claiming a refund for 2016 expires when tax season ends this April. So what do you do? You file a "Protective Claim" for a refund. You should do this for all years you paid the penalty, not just 2016. In Publication 17, the IRS describes how to do this:
"Generally, a protective claim is a formal claim or amended return for credit or refund normally based on current litigation or expected changes in tax law or other legislation. You file a protective claim when your right to a refund is contingent on future events and may not be determinable until after the statute of limitations expires. A valid protective claim doesn't have to list a particular dollar amount or demand an immediate refund. However, a valid protective claim must:
- Be in writing and signed;
- Include your name, address, SSN or ITIN, and other contact information;
- Identify and describe the contingencies affecting the claim;
- Clearly alert the IRS to the essential nature of the claim; and
- Identify the specific year(s) for which a refund is sought.
Basically, file an amended return and write at the top of the front page: "Filing a Protective Claim for ACA penalty refund per Texas vs. U.S., No. 19-10011 (5th Cir. December 18, 2019)"
Mail to the address in the Amended return instructions. Then wait...and wait...If the court case is upheld all the way to the Supreme Court - REFUND!
good news
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