Affordable Care Act Health Coverage Exemptions and Payments
The Affordable Care Act (ACA) will affect your federal income tax return.
The ACA requires you and your dependents to:
- have health care coverage, or
- an exemption from the coverage requirement,
- or make a shared responsibility payment (pay a penalty) with your return for any month without coverage or an exemption.
Five things you should know about exemptions from the ACA coverage requirement and the individual shared responsibility payment that will help you get ready to file your tax return:
- You may be eligible to claim an exemption from the requirement to have coverage and are not required to make a payment. If you qualify for an exemption, you will need to file Form 8965, Health Coverage Exemptions, with your tax return. You can claim most exemptions when you file your tax return. However, you must apply for certain exemptions in advance through the Health Care Insurance Marketplace (referred to as the Marketplace).
- If you receive an exemption through the Marketplace, you’ll receive an Exemption Certificate Number to include when you file your taxes. If you have applied for an exemption through the Marketplace and are still waiting for a response, you can put “pending” on your tax return where you would normally put your ECN.
- You do not need to file a return solely to report your coverage or to claim a coverage exemption. If you are not required to file a federal income tax return for a year because your gross income is below your return filing threshold, you are automatically exempt from the shared responsibility provision for that year and do not need to take any further action to secure an exemption.
- If you file a tax return and your income is below the filing threshold for your filing status, you should use Part II of Form 8965, Coverage Exemptions Claimed on Your Return for Your Household, to claim a coverage exemption. You should not make a shared responsibility payment if you are exempt from the coverage requirement because you have income below the filing threshold.
- If you do not have qualifying coverage or an exemption for the year, you will need to make an individual shared responsibility payment for each month without coverage or an exemption when you file your return. If you have to 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.