The individual shared responsibility provision requires taxpayers to do at least one of the following:
- Have qualifying health coverage called minimum essential coverage
- Qualify for a health coverage exemption
- Make a shared responsibility payment with their federal income tax return for the months that without coverage or an exemption.
For Tax Year 2017, the IRS will not consider a return complete and accurate if the taxpayer does not report full-year coverage, claim a coverage exemption, or report a shared responsibility payment on the tax return.Most taxpayers have qualifying health coverage for all 12 months in the year, and will check the "Full-year coverage" box on their tax return. Taxpayers who do not have full-year coverage will indicate whether they qualify for a coverage exemption or owe a shared responsibility payment.
Executive Order 13765 was issued on January 20, 2017, and directed federal agencies to exercise authority and discretion available to them to reduce potential burden. However, legislative provisions of the ACA are still in force until changed by the Congress, and taxpayers remain obligated to follow the law and pay what they may owe. Taxpayers should continue to file their tax returns as they normally would.
Find out if you’re eligible for a coverage exemption or must make a payment by using our interactive tool, Am I eligible for a coverage exemption or required to make an Individual Shared Responsibility Payment?.
Everyone in your family must:
Report Minimum Essential Coverage
Many people already have minimum essential coverage. If this applies to you, you'll simply report your coverage when you file your tax return every year. If you and your family members all had minimum essential coverage for each month of the tax year, you will indicate this on your tax return by checking a box on Form 1040, 1040A or 1040EZ. No further action is required
Minimum essential coverage includes:
- Most health coverage provided by your employer
- Health insurance purchased through a Health Insurance Marketplace in the area where you live, where you may qualify for financial assistance
- Coverage provided under a government-sponsored program for which you are eligible - including Medicare, most Medicaid, and health care programs for veterans
- Health insurance purchased directly from an insurance company
- Other health coverage that is recognized by the Department of Health & Human Services as minimum essential coverage.
For any month that you or anyone in your family does not have minimum essential coverage, you will need to claim or report a coverage exemption or make a shared responsibility payment when you file your tax return.
Claim or Report a Coverage Exemption
If you meet certain criteria for the tax year, you may be exempt from the requirement to have minimum essential coverage. You will not have to make a shared responsibility payment for any month that you are exempt. Instead, you'll file Form 8965, Health Coverage Exemptions, with your federal income tax return. For any month that you do not qualify for a coverage exemption, you will need to have minimum essential coverage or make a shared responsibility payment.
How you get an exemption depends upon the type of coverage exemption for which you are eligible. You can claim most exemptions when you file your tax return. However, you must get certain exemptions from your Marketplace in advance. You'll report a marketplace-granted exemption when you file your tax return.
You may be exempt if you meet one of the following:
- The lowest-cost coverage available to you is considered unaffordable
- You have a gap in coverage that is less than 3 consecutive months
- You qualify for an exemption for one of several other reasons, including having a hardship that prevents you from obtaining coverage, or belonging to a group specifically exempt from the coverage requirement
Calculate and Make a Shared Responsibility Payment
For any month during the year that you or any of your family members don’t have minimum essential coverage and don’t qualify for a coverage exemption, you are required to make an individual shared responsibility payment when you file your tax return. The payment is reported on Form 1040 in the Other Taxes section and on the corresponding sections on Form 1040A and 1040EZ
In general, the annual payment amount is the greater of a percentage of your household income or a flat dollar amount, but is capped at the national average premium for a bronze level health plan available through the Marketplace.
If you must make a payment, you can use the worksheets located in the instructions to Form 8965, Health Coverage Exemptions, to figure the shared responsibility payment amount due. For more information about determining the amount and reporting your payment on your tax return, see our Reporting and Calculating the Payment page.
To estimate the amount of individual shared responsibility payment you may owe - see this shared responsibility payment estimator.
More detailed information about the individual shared responsibility provision is available on our questions and answers , our resources pages and on the Tax Topic 561 - Individual Shared Responsibility Provision page.