According to the Affordable Care Act, taxpayers and every member of their family needs to somehow account for their health coverage. This can be accomplished by purchasing at least minimum essential coverage, making an individual shared responsibility payment at the time that you file your income tax return, or demonstrating that you qualify for an exemption. You may be exempt if you meet any of the following requirements:
- The minimum amount you would be required to pay for your annual premiums exceeds eight percent of your household’s income.
- The time you spent without proper coverage last year was less than three consecutive months.
- You suffer from a hardship that prevents you from acquiring coverage.
- You are incarcerated.
- You belong to a group that is explicitly exempt from this requirement, like a Federally-recognized Indian tribe or certain religious sects.
Should you qualify, you can claim or report any coverage exemptions on Form 8965, Health Coverage Exemptions, and submit it with Form 1040, 1040A, or 1040EZ. If you spent any time over the past year wherein you did not have coverage, you will need to make a shared responsibility payment for every month wherein you do not qualify for an exemption.
If you require additional help in filing your 2014 taxes, please contact Seattle CPA Alisa Na during normal business hours.