What to Bring to your Tax Appointment: ACA Exemptions

January 07, 2015 : Lindsey Buchholz

Ed note: If you didn’t have health insurance in 2014 and have heard that you may be required to pay a penalty when you file your tax return, there is some good news. Read on to determine if you qualify for an exemption from that penalty – and how to go about getting it.

By this point, you have probably heard that most Americans are required to have minimum essential health care coverage.

However, for some people, paying the monthly premiums is quite difficult, or other life circumstances make it challenging to pay for health insurance. If you do not qualify for federal coverage under a program like Medicaid or Medicare, do not have coverage through your employer and feel you cannot manage paying for health insurance through a Marketplace, you may want to investigate whether you qualify for a hardship exemption. If you do qualify for the hardship exemption, you will not have to pay the penalty for not having health insurance coverage.

In order to qualify, you will want to bring some documents to your tax appointment, so the tax pro assisting you can complete the required forms. The necessary documents will depend on what kind of hardship you have experienced. Regardless, you should know basic information for yourself and the members of your household including:

  • Name
  • Date of birth
  • Address
  • Social security number

Hardships

[table width=”600″ colwidth=”290|20|290″ colalign=”left|left|left”]
Type of hardship||Documents to bring
You were homeless||None
You were evicted in the last 6 months or were facing eviction or foreclosure||Copy of eviction or foreclosure notice
You recently experienced domestic violence||None
You recently experienced the death of a close family member||Copy of death certificate, death notice from newspaper or copy of other official death notice
You experienced a fire, flood or other natural or human-caused disaster that caused substantial damage to   your property||Copy of police or fire report, insurance claim or other document from a government agency, private entity or news source documenting the event
You filed for bankruptcy in the last 6 months||Copy of bankruptcy filing
You had medical expenses you couldn’t pay in the last 24 months||Copies of medical bills
You experienced unexpected increases in necessary expenses due to caring for an ill, disabled or aging family member||Copies of receipts related to care
You expect to claim a child as a tax dependent who has been denied coverage in Medicaid and the Children’s Health Insurance Program (CHIP), and another person is required by court order to give medical support to the child||Copy of medical support order AND copies of eligibility notices for Medicaid and CHIP showing that the child has been denied coverage
As a result of an eligibility appeals decision, you’re eligible either for: 1) enrollment in a qualified health plan (QHP) through the Marketplace, 2) lower costs on your monthly premiums, or 3) cost-sharing reductions for a time period when you weren’t enrolled in a QHP through the Marketplace.||Copy of notice of appeals decision
You received a notice saying your current health insurance plan is being cancelled, and you consider the other plans available unaffordable||Copy of notice of cancellation
You experienced another hardship in obtaining health insurance||Submit any documentation, if possible
[/table]

Procedure

Your H&R Block tax pro can help prepare the application for a hardship exemption and submit it to the Health Insurance Marketplace. If you are granted the exemption, you will receive an Exemption Certificate Number that will be used on your federal income tax return.

Other Exemptions

These are not the only reasons that you may be exempt from the shared responsibility payment.

Several other exemptions do not require you to bring any additional information or file a separate form. If your household or gross income is below the threshold required to file a return, you may be exempt. Use the IRS interactive tool to determine if you need to file a return. If your cost of available employer provided or Marketplace coverage exceeded 8% of your household income, you may be exempt. You will also be exempt if your state did not expand its Medicaid program and your household income is less than 138% of the Federal Poverty Level.

There are other exemptions available to certain religious sects, incarcerated individuals, Native American Tribal members, and those who are eligible for services through an Indian health care provider. Come talk with an H&R Block ACA Specialist on Jan. 8 or make an appointment to discuss your situation in more detail at another time.

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Lindsey Buchholz

Lindsey Buchholz

The Tax Institute, H&R Block

Lindsey Buchholz, JD, LLM, MBA, is a program manager at The Tax Institute. Lindsey leads research teams and regulatory implementation of the Patient Protection and Affordable Care Act across H&R Block.