IRS Releases Tax Tip - You May Be Exempt From The Obamacare Penalty
For many Americans the Health Insurance Exchange Alternative has provided a better health insurance alternative than the government exchange. Most who purchased the insurance available through the Health Insurance Exchange Alternative have qualified for Exemptions from the Shared Responsibility Tax. To be sure that you are exempt from this tax please refer to the following Tax Tip. You can use this same Tax Tip to pre-qualify for the Exemtions you will need for your 2016 coverage.
1. To verify that you qualify for a penalty exemption use the IRS interactive online tool.
2. If you think you qualify for an exemption, you need to include IRS Form 8965, Health Care Exemptions, with your regular tax return. In some cases, you might have to apply for particular exemptions ahead of time through the Marketplace. This is required, for example, if you experienced certain hardship situations or if you are a member of certain religious sects.
3. Should the Marketplace grant you an exemption, it will send you an Exemption Certificate Number (ECN) that you file with your tax return on Form 8965, in Column C of Part I. If you are still waiting for a response from the Marketplace when you file your return, enter "pending" instead of the ECN.