Clear Start Tax Issues Alert: No Federal Penalty for the Uninsured, But Some States May Still Charge You

Clear Start Tax clarifies why some states still require Form 1095-A, even though the federal health coverage penalty was eliminated.

IRVINE, CA / ACCESS Newswire / July 4, 2025 / Despite the federal penalty being eliminated, many taxpayers are still receiving health insurance forms, leaving them unsure whether action is required. Clear Start Tax is warning filers not to ignore Form 1095-A, especially in states that still enforce their own coverage mandates.

“The IRS eliminated the federal individual mandate penalty in 2019, but that doesn’t mean everyone is off the hook,” said the Head of Client Solutions at Clear Start Tax. “Several states still require proof of coverage, and skipping Form 1095-A or other related forms can delay your return – or worse, result in state fines.”

Why You May Still Receive Form 1095-A

Many taxpayers think the form is irrelevant now that the ACA penalty is gone. But Clear Start Tax explains that Form 1095-A is still issued if you enrolled in a Marketplace health plan, and it plays a key role in reconciling any premium tax credits you received. It’s also used to reconcile the advance premium tax credits you received with what you actually qualified for, based on your reported income.

If the numbers don’t match what the IRS or your state expects, your refund could be delayed or adjusted.

States That Still Enforce Health Insurance Penalties

Even though the federal penalty is gone, a growing number of states have their own health coverage mandates – and their own penalties. As of 2025, these states still impose a fine if you go without qualifying coverage and don’t qualify for an exemption:

• California

• Massachusetts

• New Jersey

• Rhode Island

• Vermont (reporting only)

• Washington, D.C.

These states often require taxpayers to file specific health coverage forms along with their state return, and missing or inaccurate documentation can trigger state-level penalties.

What to Do If You’re Uninsured or Received a Marketplace Form

Clear Start Tax advises taxpayers to take the following steps to avoid penalties or processing delays:

• Don’t ignore Form 1095-A – include it with your return if applicable.

• Check your state’s requirements if you live in one that enforces coverage mandates during the tax year.

• Make sure your premium tax credits were reconciled properly to avoid refund issues.

• File all required health coverage documentation, especially in California, where the Franchise Tax Board tracks non-compliance aggressively.

“Many people are caught off guard because they assume health insurance is no longer part of tax season,” said the Head of Client Solutions. “But in states with mandates, missing documentation can still cost you money.”

Behind on Taxes or Hit With a Penalty? Relief May Be Available

Health-related penalties can overlap with broader tax issues, including unfiled returns, missed income, or existing IRS debt. Clear Start Tax helps individuals nationwide resolve complex tax situations and determine eligibility for the IRS Fresh Start Program.

By answering a few simple questions, taxpayers can find out if they’re eligible for the IRS Fresh Start Program and take the first step toward resolving their tax debt.

About Clear Start Tax

Clear Start Tax is a full-service tax liability resolution firm that serves taxpayers throughout the United States. The company specializes in assisting individuals and businesses with a wide range of IRS and state tax issues, including back taxes, wage garnishment relief, IRS appeals, and offers in compromise. Clear Start Tax helps taxpayers apply for the IRS Fresh Start Program, providing expert guidance in tax resolution. Fully accredited and A+ rated by the Better Business Bureau, the firm’s unique approach and commitment to long-term client success distinguish it as a leader in the tax resolution industry.

Need Help With Back Taxes?

Click the link below:
https://clearstarttax.com/qualifytoday/
(888) 710-3533

Contact Information

Clear Start Tax
Corporate Communications Department
seo@clearstarttax.com
(949) 535-1627

SOURCE: Clear Start Tax

View the original press release on ACCESS Newswire