Using first-principles calculations, we investigate the electronic and vibrational properties of monolayer T-phase TaS2. We demonstrate that a charge-density wave is energetically favorable at low temperature, similar to bulk 1T-TaS2. Electron-phonon coupling is found to be essential for the lattice reconstruction. The charge-density wave results in a strong localization of the electronic states near the Fermi level and consequently in spin polarization, transforming the material into a magnetic semiconductor with enhanced electronic correlations. The combination of inherent spin polarization with a semiconducting nature distinguishes the monolayer fundamentally from the bulk compound as well as from other two-dimensional transition metal dichalcogenides. Monolayer T-phase TaS2 therefore has the potential to enable two-dimensional spintronics. © 2014 American Physical Society.