tax breaks — December 15, 2014

When the ACA Doesn't Apply: All About Exemptions

by Bobby Willover

ACA, Exemptions

While the ACA requires most Americans to carry health insurance, several exemptions are available. Here’s a look at what the exemptions are and how they may apply to you and your family.

There are how many exemptions?

Quite a few, actually. If you qualify for an exemption, it means you won’t have to pay a penalty for not having insurance. A few hardship exemptions are more focused on financial circumstances.

Here’s the list:

  • You and your family are uninsured for less than 3 months in a row in 2014. This exemption is claimed on your taxes.
  • The lowest-priced health insurance would cost more than 8% of your 2014 household income. This exemption is claimed on your taxes.
  • You don’t have to file a tax return because your income was too low. Depending on your age and family size, the income amount varies. This exemption is claimed on your taxes.
  • You and your family are members of a federally recognized tribe, or you and your family are eligible for services through an Indian Health Services Provider. This exemption can be claimed on your taxes or the Marketplace.
  • You and your family are members of a recognized health care sharing ministry. This exemption can be claimed on your taxes or the Marketplace.
  • You and your family are members of a recognized religious organization with religious objections to insurance, including Social Security and Medicare. This exemption is claimed on the Marketplace.
  • You were not lawfully present in the U.S. This exemption is claimed on your taxes.
  • You were incarcerated (either detained or jailed). This exemption can be claimed on your taxes or the Marketplace.
  • You have a financial hardship, such as:
    • You recently received a shut-off notice from a utility company.
    • You or your family had medical expenses you could pay in the last 24 months (2 years) that resulted in substantial debt.
    • You and your family filed for bankruptcy in the last 6 months.
    • You and your family were evicted, faced eviction, or were foreclosed on in the past 6 months.
    • You and your family experienced unexpected increases in your costs for caring for an ill, disabled, or aging family member or relative.

Tip: If you apply for and receive an exemption, you'll get an Exemption Certificate Number or ECN. Make sure you don't lose that number, because you'll need when you file your taxes.

What’s next?

When you file your taxes with 1040.com, we’ll ask you a few questions to see if you qualify for an ACA exemption. If you qualify, you’re all set … at least until next year.

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