Health Care And Obamacare Penalty Exemption

If you didn’t have qualifying health insurance, you owe a shared responsibility payment. However, if you qualify for an exemption, you’ll reduce or eliminate your shared responsibility payment. It’s also possible that members of your household will qualify for different exemptions.

Here are some exemptions you can claim:

  • Religious reasons — You’re a member of one of these:
    • A recognized religious sect that objects to insurance
    • A health care sharing ministry
  • Indian tribes — You’re either of these:
    • A member of a federally recognized tribe
    • Not an Indian tribe member, but eligible for services through an Indian Health Services provider
  • Low income — Your income is below the filing requirement.
  • Short coverage gap — You were uninsured for no more than two consecutive months of the year.
  • Financial hardships:
    • You were homeless, evicted, or facing eviction or foreclosure in the past six months.
    • You received a shut-off notice from a utility company.
    • You filed for bankruptcy in the last six months or incurred substantial debt for medical expenses in the last 24 months that you couldn’t pay.
  • Personal hardships:
    • You’re a recent victim of domestic violence.
    • You recently experienced the death of a close family member.
    • You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member.
    • You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property.
  • Insurance eligibility reasons:
    • You expected to claim a child as a dependent who’s:
      • Supposed to receive medical support from another person, as ordered in court
      • Been denied coverage in Medicaid and Children’s Health Insurance Program (CHIP)
    • You were determined ineligible for Medicaid since your state didn’t expand eligibility under the Affordable Care Act (ACA).
    • You have a marketplace eligibility appeal
    • You experienced another hardship in obtaining health insurance.
  • Citizenship status — You can be exempt if you’re:
    • Not a U.S. citizen, or U.S. national, or an alien lawfully present in the U.S.
    • A U.S. citizen or resident who qualifies for the foreign earned income exclusion
    • A bona fide resident of any U.S. possession
  • Affordability — The lowest-priced plan you can get costs more than 8.05% of your household income.
  • Incarceration — You’re detained or jailed, and not being held pending disposition of charges. This means you have already been sentenced and are currently serving it out.

If you applied for an exemption through the marketplace when you signed up for insurance, you’ll receive a certificate when you’re approved. If your exemption is still in pending status, tell us about the exemption type. Or, we will help you apply for any remaining exemptions that might still apply to you.

Related Topics

Related Resources

IRS Letter 979 – Your Records Were Not Adequate

Learn more about letter 979 and how to handle an IRS audit of your business return with help from the tax experts at H&R Block.

IRS Notice CP11 – Changes to Form 1040 & Amount Due

Did you receive an CP11 IRS Notice? Learn what this message means and what you may need to do. Get tax answers from H&R Block.

Seize Assets

Get the facts from H&R Block about IRS levies, which seize assets, like your wages, your bank account balance, and more income sources.

I have a balance due on my return and can’t pay it. Can I set up an IRS payment plan?

If you have a tax balance that you can't pay right away, consider your payment options with us. Get tax answers at H&R Block.