Taxes CPA

Phoenix Accounting | ACA Exemptions

When filing a tax return this, many tax payers are left scrambling trying to figure a way out of paying the shared responsibility payment for not maintaining minimum essential coverage throughout 2014. The Affordable Care Act requires all taxpayers as well as all of the members of their family to have minimum essential coverage for each month of 2014 or face a shared responsibility payment (penalty) when they file their tax return. There are, however, some exemptions from the requirement that tax payers could qualify for.

You may be exempt from maintaining minimum essential coverage if you meet any of the following:

  • The minimum amount you must pay for the annual premium is more than 8 percent of your household income
  • You have a gap in coverage that doesn’t span more than 3 consecutive months
  • You have a hardship that prevents you from obtaining coverage
  • You belong to a religious group that is explicitly exempt from the requirement

You will use form 8965 to claim the exemption. This form will then be attached to your form 1040. Tax payers do not need to contact the IRS or the healthcare exchange to obtain the exemption in advance.

If you are granted a coverage exemption form the Marketplace, you will receive a notice with your unique Exemption Certificate Number (ECN). You will use this number will you fill out form 8965. If the Marketplace still has not issued your certificate number before you file your income tax return, complete form 8965 as much as possible and enter “pending” on the line requesting the ECN.

If your income doesn’t meet the filing threshold and you don’t file a tax return, you are eligible for an automatic exemption and you do not need to file to claim an exemption.

If you have any questions or would like to discuss this further, do not hesitate to contact us at Dusseau & Makris, PC, your Phoenix CPA firm.