8848 / How does a taxpayer who may be exempt from the Affordable Care Act requirements obtain the exemption?
An individual who may have been exempt from the ACA individual penalty provisions could often obtain a certificate of exemption from the health insurance exchanges. With respect to the religious and hardship exemptions, this was the only method of claiming the exemption. Individuals claiming the exemption based upon membership in an Indian tribe or incarceration could either obtain a certificate of exemption from the exchanges or claim the exemption on the federal tax return when the return was filed in the subsequent tax year. Exemptions for lack of affordable coverage, a short coverage gap, and certain hardships were required to be claimed on the taxpayer’s federal income tax return.
Individuals who were exempt from the shared responsibility provision because their income for the year fell below the filing threshold, so that they were not required to file a federal tax return for the year, did not need to take any action in order to obtain the exemption.1
The IRS has also provided a list of the hardship exemptions that a taxpayer was entitled to claim without first obtaining a hardship exemption certification from the health insurance exchanges.2 The hardship exemptions outlined in this notice were available if two or more members of a family had a combined cost of employer-provided health coverage that was deemed unaffordable, a taxpayer’s gross income was below the applicable threshold for filing a tax return, or a taxpayer applied for minimum essential health coverage during the periods described in the notice, or applied for coverage and could not complete the process.