2021 California Code
Revenue and Taxation Code - RTC
DIVISION 2 - OTHER TAXES
PART 32 - Individual Shared Responsibility Penalty
Section 61005.
(a) The Legislature finds and declares both of the following:
(1) The reporting requirement provided for in this section is necessary for the successful implementation of the penalty imposed by Section 61010. In particular, this requirement provides the only widespread source of third-party reporting to help applicable individuals and the Franchise Tax Board verify whether an applicable individual maintains minimum essential coverage. There is compelling evidence that third-party reporting is crucial for ensuring compliance with those tax provisions.
(2) The reporting requirement in this section has been narrowly tailored to support compliance with the penalty imposed by Section 61010, while imposing only an incidental burden on reporting entities. In particular, the information required to be reported under this section is limited to the information already required to be reported under a similar federal reporting requirement under Section 6055 of the Internal Revenue Code of 1986. In addition, this section provides that its reporting requirement may be satisfied by providing the same information that is currently reported under that federal requirement.
(b) For purposes of administering the penalty imposed by this part on applicable individuals who fail to maintain minimum essential coverage as required by Title 24 of the Government Code:
(1) An applicable entity that provides minimum essential coverage to an individual during a calendar year shall, at the time the Franchise Tax Board prescribes, make a return to the Franchise Tax Board in the form and manner described in subdivision (c) or (d) on or before March 31 of the year following the calendar year for which the return is required.
(2) An applicable entity described in paragraph (2) of subdivision (a) of Section 61000 shall not be required to make the return specified in paragraph (1) if the applicable entity that is described in paragraph (1) of subdivision (a) of Section 61000 makes that return.
(c) Except as provided in subdivision (d), an applicable entity shall make a return that complies with all of the following:
(1) Is in the form as the Franchise Tax Board prescribes.
(2) Contains the name, address, and taxpayer identification number of the applicable individual and the name and taxpayer identification number of each other individual who receives coverage under the policy.
(3) Contains the dates during which the individuals specified in paragraph (2) were covered under minimum essential coverage during the calendar year.
(4) Contains any other information as the Franchise Tax Board may require.
(d) Notwithstanding the requirements of subdivision (c), a return complies with the requirements of this section if it is in the form of, and includes the information contained in, a return described in Section 6055 of the Internal Revenue Code of 1986, as that section is in effect on December 15, 2017.
(e) Except as provided in subdivision (g), an applicable entity required to make a return under subdivision (b) shall provide to each primary subscriber, primary policyholder, primary insured, employee, former employee, uniformed services sponsor, parent, or other related person named on an application who enrolls one or more individuals, including themselves, in minimum essential coverage a written statement in the form and manner described in subdivision (f) on or before January 31 of the year following the calendar year for which the return is required under subdivision (b).
(f) The written statement required by subdivision (e) shall include both of the following:
(1) The name and address of the person required to make the return and the telephone number of the contact information for that person.
(2) The information required to be shown on the return, as specified in subdivision (c).
(g) Notwithstanding subdivisions (e) and (f), the requirements of this section may be satisfied by a written statement provided to an individual under Section 6055 of the Internal Revenue Code of 1986, as that section is in effect and interpreted on December 15, 2017.
(h) In the case of coverage provided by an applicable entity that is a governmental unit or an agency or instrumentality of that unit, the officer or employee who enters into the agreement to provide the coverage, or the person appropriately designated for purposes of this section, shall be responsible for the returns and statements required by this section.
(i) An applicable entity may contract with third-party service providers, including insurance carriers, to provide the returns and statements required by this section.
(j) Except for the applicable entities described in paragraphs (3) and (4) of subdivision (a) of Section 61000, a penalty shall be imposed on an applicable entity that fails to make a return as required by subdivision (b) in an amount of fifty dollars ($50) per applicable individual covered by the applicable entity for a taxable year in which the failure occurs.
(Added by Stats. 2019, Ch. 38, Sec. 42. (SB 78) Effective June 27, 2019.)
