Form 8965 for Health Coverage Exemptions

Attention: There is no longer a federal mandate to have health insurance. Thus, when you prepare and e-file your current year tax return here on eFile.com, you will not be assessed any federal penalties for not having health insurance. You will, however, need to report your 1095-A if you received healthcare through the Marketplace. Some states, like California, still have a tax penalty for not having healthcare - the California penalty is the Individual Shared Responsibility or ISR. When you enter your healthcare information, the tax app will generate all applicable healthcare forms for your federal and state returns.

No Health
Insurance Mandate

Since the individual mandate is no longer required and exemptions are not relevant for 2019 and all future returns, the information below is not applicable; however, we will keep it here for 2018 and prior year returns.

At eFile.com, we cover all the healthcare tax forms in the following pages:

Form 1095-A-Health Insurance Marketplace Statement
Form 1095-B-Health Coverage
Form 1095-C-Employer-Provided Health Insurance Offer and Coverage
Form 8962-Premium Tax Credit
Form 8965-Health Coverage Exemptions (this page).

Form 8965

Form 8965 was used to report an exemption from owing a tax payment for not having health insurance during the Tax Year 2018 and earlier tax years. Because of this, IRS Form 8965 no longer gets updated as it is not used on current year tax returns.

You should include this form with your tax return in order to report your health insurance exemption from owing a tax payment. You can no longer electronically file returns for 2018 or earlier, but you can download, manually prepare, and mail in your tax return for a previous tax year.

Search for free IRS and state tax forms here.

Reporting Healthcare on Your Tax Return

You must file a tax return with Form 8965 if you or anyone in your family qualified for a health coverage exemption. If your income was below the tax return filing requirements, you did not need to file a tax return to only report your coverage or claim the exemption. Therefore, you were automatically exempt from the shared responsibility payment.

However, if you choose to file a tax return, you will need to claim the coverage exemption, but you should be exempt from making the payment since your income was below the filing requirements.

To find out if you need to (or want to) file a tax return, use our free FILEucator tax tool.

If you were already granted and approved for an exemption through your health insurance Marketplace, you don't need to include Form 8965 with your tax return. Otherwise, you will need to include the form with your return in order to qualify for the exemption. You should send the form to the IRS with your completed tax return.

Form 8965 Exemptions

You can only claim the following exemptions on Form 8965:

Unaffordable coverage (either through employer or self-employed)
Short coverage gap
Income below filing requirement
Citizen living abroad or certain non-citizen
Resident of state that did not expand Medicaid (Alabama, Alaska, Florida, Georgia, Idaho, Indiana, Kansas, Louisiana, Maine, Mississippi, Missouri, Montana, Nebraska, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, and Wyoming)
Being a member of a heath care sharing ministry
Being a member of an Indian tribe
Being incarcerated.

You can claim any of the exemptions above on Form 8965.

Exemptions That Cannot Be Claimed

Though you can report most healthcare exemptions on Form 8965, you must apply for the following exemptions via the Marketplace:

Being a member of a religious sect
You had a hardship (i.e. eviction, homelessness, foreclosure, death of a close family member, domestic violence, unpaid medical bills) that prevented you from obtaining health coverage under a qualified health plan
You do not have access to affordable coverage based on your projected household income
You were deemed ineligible for Medicaid in a state that did not expand Medicaid coverage
You were notified by your health insurance provider that your policy was not renewable and you considered that other plans available to you were not affordable
You were covered by short-term duration or self-funded insurance provided by AmeriCorps State and National, VISTA, or NCCC programs.

For information on how to report the exemptions above through the Marketplace, visit healthcare.gov.

Reporting Healthcare Exemptions to the IRS

You claim your health insurance exemption(s) on Form 8965 and attach the form to your tax return. You only need to submit one Form 8965 with your tax return, using separate lines to report each individual and the exemption type. Even if you had a one-month exemption during the year, you need to report that one month on your return. However, you will not owe a tax payment for not having insurance for that month.

More Information on Health Insurance and Taxes

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