IRS Notice CP22H – Adjustment to Your Shared Responsibility Payment means that the IRS made the changes you requested to your tax return for the tax year on the notice, which also changed your shared responsibility payment. In making an adjustment to your Shared Responsibility Payment, it has resulted in a balance that is now due. This type of notice is under the “Unpaid balance” category.
REASONS FOR RECEVING THE CP22H NOTICE
Here are the possible reasons why you received IRS Notice CP22H:
- You filed a tax return with the IRS.
- The IRS made a Shared Responsibility Payment (SRP) adjustment to your return based on information it received that resulted in a balance due.
- The IRS sent Notice CP22H to inform you of the adjustment and the resulting balance due for that tax year.
WHAT YOU NEED TO DO WHEN YOU RECEIVE NOTICE CP22H
As usual, the first step is to read the notice CP22H sent to you and understand what was sent. If you know your taxes well, you may not need guidance. However, if you have no idea what the IRS means, you can contact the IRS directly using the phone number provided on the top right corner of the notice or you can consult a tax professional to assist you or contact the IRS on your behalf. If after you have understood the message and you disagree with what the IRS sent, you will still need to contact the IRS for clarification. Obviously you will need to provide them with information about your tax returns. This is why it is important to always keep your tax documents safe for future references.
On the other hand, if you agree with what the IRS sent, you will see a balance due that you are required to pay to the IRS. According to the IRS, If you don’t pay your tax in full when you file your tax return, you’ll receive a bill for the amount you owe. This bill starts the collection process, which continues until your account is satisfied or until the IRS can no longer legally collect the tax. In this case, what caused you to have a balance due is the fact that changes were made to your Shared Responsibility Payments (SRP). This notice CP22H explains the balance due and demands payment in full. It will include the amount of the tax, plus any penalties and interest accrued on your unpaid balance from the date the tax was due. If you can’t pay in full, you should send in as much as you can with the notice and explore other payment arrangements.
NOTICE DEADLINE –The deadline is specified on the notice
If you know you will not be able to pay the entire tax balance due when you file your tax return, you can file a Form 9465, Installment Agreement Request with your tax return to request a payment plan. If you have already filed your return with an unpaid balance due, you can send the Form 9465 on its own.
Installment agreements are monthly payments you make to the IRS when you are unable to pay your tax debt immediately or before the deadline given in the notice. You will need a tax professional to help you choose the best possible agreement that will allow you to complete your tax debt comfortably. The installment agreement the Internal Revenue Service (IRS) decides to give you depends on your circumstance, how much you owe and how fast you can complete the payments.
SHARED RESPONSIBILITY PAYMENT
According to the Internal Revenue Service (IRS), the individual shared responsibility provision of the health care law requires you, your spouse if you file a joint return, and your dependents to have qualifying health care coverage (minimum essential coverage), qualify for a health coverage exemption, or make a shared responsibility payment when filing your federal income tax return. The annual payment amount is either a percentage of your household income in excess of the return filing threshold or a flat dollar amount, whichever is greater.
Usually, if you do not have health care coverage that meets the criteria for minimum essential coverage or qualify for an exemption, you will need to calculate your shared responsibility payment when you file your tax return. For 2017, the payment was a flat fee of $695 or 2.5% of household income (whichever was greater) less the filing threshold which was $10,350 for 2017 for a single individual. The family maximum payment for 2017 was $2,085. The IRS also made it known that household income includes income from all family members claimed on the tax return including dependents. If you are not required to file a tax return because your income is below the filing threshold, you are automatically exempt for that year.
If you are unable to pay the shared responsibility payment (SRP) in full when you file your return, you can request an installment agreement to make monthly payments on the balance due. There is no failure to pay penalties for not paying the SRP by the due date and the IRS cannot file a tax lien or levy for an unpaid SRP balance. However, failure to pay penalties will still apply to any non SRP portion of an unpaid balance you cannot pay by the due date.
The federal health care law known as the Affordable Care Act (ACA) required all Americans to have health insurance for tax years before 2019. Then, if you did not have health insurance, you must get an exemption from the requirement to buy coverage, or wind up paying a tax penalty. The law says citizens, employers and government share the responsibility of keeping everyone covered, so the penalty for going without insurance was dubbed the “shared responsibility payment.”
This means that before 2019, if you had an exemption, you did not have to pay the shared responsibility penalty even if you didn’t buy health insurance. From the beginning of 2019, it was said that there will be no penalty for not having health insurance.