Instructions For Form 8965 - Health Coverage Exemptions

Fitz elect to report Charlie’s taxable interest on Form 8814. Be-

claiming two or more different types of coverage exemptions that

cause Charlie's only income was $1,100 of taxable interest,

have the same code listed in the

Types of Coverage Exemptions

line 1a on Form 8814 is $1,100, line 1b is zero, line 4 is $1,100,

chart, use a single line to claim those coverage exemptions. If

and line 5 is $2,100. Because the amount on line 4 is less than

you need more than six lines, attach an additional page showing

the amount on line 5, they add it to the amount on line 1b for a

the information required in columns (a) through (p), as applica-

total of $1,100 (zero on line 1b + $1,100 on line 4). They add the

ble, for each additional coverage exemption.

$1,100 from Form 8814 to their MAGI of $16,000 for household

Coverage exemptions that may be granted for less than

income of $17,100. Their household income is less than their fil-

a full tax year apply to each month in which an individu-

TIP

ing threshold, so Lizzie and Fitz complete Form 8965, checking

al was eligible for the coverage exemption for at least

the box on line 7 and leaving Part III blank.

one day in that month. For example, if following the disposition of

Example 3. The facts are the same as Example 1 except

charges, an individual is incarcerated from June 28 to July 28,

that Lizzie and Fitz aren’t claiming the earned income credit.

the individual is eligible for the coverage exemption for June and

They don’t need to file a tax return. They and everyone in their

July.

tax household are exempt from the requirement to have mini-

Lines 8–13

mum essential coverage or make a shared responsibility pay-

ment and need to do nothing further to claim the coverage ex-

Column (a)—Name of Individual

emption.

Enter the name of each person in your tax household for whom

you are claiming a coverage exemption on that line. If the indi-

Gross Income

vidual is listed on page 1 of your tax return, enter the name ex-

To claim this coverage exemption based on your gross income,

actly as it appears on your tax return.

you must first figure your gross income. Then compare your

gross income to the filing threshold that applies to you based on

Column (b)—Social Security Number (SSN)

your filing status. See

Filing Thresholds for Most

People. If your

Enter the SSN of the individual listed in column (a). If the individ-

gross income is less than your filing threshold, check the box on

ual is listed on page 1 of your tax return, the SSN in this column

line 7.

should match the individual’s SSN listed on your tax return. If the

If you qualify for this coverage exemption, everyone in your

individual listed in column (a) doesn’t have an SSN, see

tax household is exempt for the entire year. You don't need to

SSN, earlier.

complete Part III.

Example 1. Emma and George are both under age 65. They

Column (c)—Exemption Type

are married and have one child, whom they claim as a depend-

Use column (c) to identify the type of coverage exemption you

ent on their tax return. Emma and George file Form 1040 as mar-

are claiming for yourself or another member of your tax house-

ried filing jointly, report $20,000 of wages, $3,000 of tax-exempt

hold. Enter the code for the appropriate coverage exemption lis-

interest, and claim the earned income credit. Emma and George

ted below and in the

Types of Coverage Exemptions

chart.

figure their gross income as $20,000 (their wages).

Coverage considered unaffordable (code “A”). You can

They look at the

Filing Thresholds for Most People

chart and

claim a coverage exemption for yourself or another member of

see that their gross income ($20,000) is less than the filing

your tax household for any month in which:

threshold ($20,800). They can check the box on line 7. They

The individual is eligible for coverage under an employer

don’t need to file a return to report this coverage exemption, but

plan and that coverage is considered unaffordable, or

because they qualify for the earned income credit they file a re-

The individual isn’t eligible for coverage under an employer

turn to claim the credit. Because they are filing a return, Emma

plan and the coverage available for that individual through the

and George complete Form 8965, checking the box on line 7

Marketplace is considered unaffordable.

and leaving Part III blank.

Coverage is considered unaffordable if the individual's

re-

Example 2. The facts are the same as Example 1 except

quired contribution

(described later) is more than 8.16% of

that Emma and George aren’t claiming the earned income credit.

household income.

They don’t need to file a tax return. They and everyone in their

Use the

Affordability

Worksheet, later, to determine whether

tax household are exempt from the requirement to have mini-

this coverage exemption applies to you or another member of

mum essential coverage or make a shared responsibility pay-

your tax household for one or more months of the year.

ment and need to do nothing further to claim the coverage ex-

emption.

To claim this coverage exemption, enter code “A” in Part III,

column (c), and identify the months to which the exemption ap-

Part III—Coverage Exemptions Claimed on Your

plies as described under

Columns (d) - (p)—Calendar

Months,

Return for Individuals

later.

Use Part III to claim a coverage exemption on your tax return for

Required contribution. Your required contribution depends

yourself or another member of your tax household. Complete a

on the type of coverage you are eligible to purchase. If you or an-

line for each individual for whom you are claiming a coverage ex-

other member of your tax household is eligible for coverage un-

emption. If you are claiming more than one coverage exemption

der an employer plan, see

Determining an individual's required

for any individual, you must generally complete a separate line

contribution—Individuals eligible for coverage under an employ-

for each coverage exemption. But if, for any individual, you are

plan, later. If you or another member of your tax household

-7-

Instructions For Form 8965 - Health Coverage Exemptions - 2016 Page 7

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