IRS Health Care Tax Tip 2015-67, October 22, 2015
The individual shared responsibility provision requires you, your spouse, and your dependents to have qualifying health insurance for the entire year, report a health coverage exemption, or make a shared responsibility payment when you file. If you are applying for an exemption from the Marketplace, you should prepare early by reviewing your options and determining if you are eligible for an exemption from the requirement to have coverage.
How you get a health coverage exemption depends on the type of exemption. The IRS has posted a chart listing the types of exemptions and how to obtain them on IRS.gov/aca. You can obtain some exemptions only from the Marketplace while others you may claim when you file your tax return. You can get some exemptions by either applying for the exemption from the Marketplace or claiming it on your return.
If you are eligible for an exemption from the Marketplace, you apply for it by filling out an exemption application that you then send to the Marketplace. If the Marketplace grants your coverage exemption, they will send you a notice with your unique Exemption Certificate Number. Keep this notice with your other important tax information. You will use the ECN when you file your tax return. Be sure to apply early so that you will receive this notice before you file your tax return. Hardship exemptions are among those exemptions that you must request through the Marketplace. To qualify for a hardship exemption you must have experienced circumstances that prevented you from obtaining coverage under a qualified health plan. Those circumstances include homelessness, eviction, foreclosure, domestic violence, death of a close family member and unpaid medical bills.
For more information about obtaining exemption from the Marketplace, go to HealthCare.gov.
For a health coverage exemption that you qualify to claim on your tax return, you do not need to call or obtain the exemption from the IRS in advance. All you need to do is complete Form 8965 (PDF), Health Coverage Exemptions Part III and file it with your tax return. Use a separate line for each individual and exemption type claimed on the return.
If you do not have coverage and your income is below the filing requirement threshold for your filing status, you and your family are exempt and you will not have to make a shared responsibility payment. In this situation, you do not have to file a return to claim the coverage exemption. However, if you choose to file a return, then you will use Part II of Form 8965, Coverage Exemptions for Your Household Claimed on Your Return. Exemptions that you can claim on your tax return include exemptions for lack of affordable coverage, a short coverage gap, non-citizens not lawfully present in the United States, and certain citizens living abroad.
Find out if you qualify for an exemption by using our interactive tool, Am I required to make an Individual Shared Responsibility Payment. For information about claiming and reporting exemptions, visit IRS.gov/aca.
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