Get a load of this recently-passed Iowa legislation (SF 389, Sec. 26):
Beginning with the income tax return for tax year 2010, a person who files an individual or joint income tax return with the department under section 422.13, shall report on the income tax return, in the form required, the presence or absence of health care coverage for each dependent child for whom an exemption is claimed.
a. If the taxpayer indicates on the income tax return that a dependent child does not have health care coverage, and the income of the taxpayer's tax return does not exceed the
highest level of income eligibility standard for the medical assistance program pursuant to chapter 249A or the hawk=i program pursuant to chapter 514I, the department shall send a notice to the taxpayer indicating that the dependent child may be eligible for the medical assistance program or the Hawk-I program and providing information to the taxpayer about how to enroll the dependent child in the appropriate program. The taxpayer shall submit an application for the appropriate program within ninety days of receipt of the enrollment information.
So now instead of just trying to collect the revenue to feed Iowa's government, now the Department of Revenue is also helping to enforce mandatory applications for government-sponsored health insurance. I'm not sure what the penalties will be if you plead "none of your business."
Next up? Maybe a tax return line requiring parents to disclose whether the children are allowed too much time in front of the TV, and whether they are eating their vegetables. It can't possibly be good tax policy to use tax returns as a disguised social welfare questionnaire.
The items included in the Tax Update Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation.
Joe Kristan writes the Tax Update items, and any opinions expressed or implied are not necessarily shared by anyone else at Roth & Company, P.C. Address questions or comments on Tax Updates to