Find out how to fill out Form 8965, Health Coverage Exemptions, the form for reporting ObamaCare Exemptions. We provide a simplified breakdown of form 8965.

Due to Trump’s orders, for those who didn’t have coverage in 2016 and don’t have an exemption (and thus would owe the fee): Going Silent on line 61 is an Option, Just don’t Attest to Coverage You Didn’t Have (this could still result in a fee down the road). This should apply moving forward as well until we enter more clear times.
Didn’t get your ECN yet? Don’t worry! Just enter “PENDING” instead of your exemption number.

Exemptions Form 8965 and Instructions

Here are the official IRS form and the instructions for 8965 for 2015 coverage. See below for a simplified breakdown of form 8965.

See our File Taxes for ObamaCare page for a breakdown of all healthcare-related tax forms.

What is Form 8965 Used For?

You’ll use form 8965 to report exemptions and to help you calculate the Shared Responsibility Payment for Line 61 of your 1040.

IMPORTANT: The instructions for 8965 contain a Shared Responsibility Payment Worksheet, which tells you how to find out if you owe the fee. This is, in part, because you only owe the fee for months that you didn’t have an exemption or coverage.

TIP: To fill out form 8965, you’ll want to have completed your 1040 and have your 1095 on hand.

Who Needs to Fill out Form 8965?

Anyone who didn’t maintain coverage throughout the entire year needs to fill out an 8965 form. This is true even if you got Marketplace coverage that started after January 1st, 2014.

Exemptions and Electronic Confirmation Numbers (ECN)

Some exemptions require an Electronic Confirmation Number from the Health Insurance Marketplace. These reforms typically require proof and the submission of an application. This documentation should be done at the time of the cause of exemption.

Some exemptions last all year, others only last 3 months. Not all exemptions exempt you from the fee; some only initiate a special enrollment period.

Exemptions that don’t require confirmation numbers, such as short-term coverage gaps and affordability exemptions, can simply be claimed on this form. You won’t owe the fee for any months in which you have an exemption. However, you can technically have an exemption and still have coverage, and even cost assistance, in the same month.

See more on ObamaCare’s exemptions or read below for details, including the chart of all exemptions, as they apply to the 8965 form.

Coverage Gap Exemptions

As long as you enrolled in a Marketplace in 2014, you are allowed up to four consecutive months (January, February, March, and April) without coverage for 2014 only. Moving forward, you are only allowed three. If you get covered by January 1st, you can use that coverage gap exemption at another point in the year.

Affordability Exemptions

To determine if you are eligible for an affordability exemption, you can use the lowest cost silver plan tax tool found here. If the lowest cost silver plan on the Marketplace would cost more than 8% of your household income for self-only (or average aggregate) coverage, then you are exempt. That page also includes a tool for figuring out the second lowest cost sliver plan.

This chart shows all of the coverage exemptions available for 2016 (exemptions for Jan 1, 2016, to Dec 31, 2016). Exemptions typically don’t change much year-to-year.

Simplified Instructions for Form 8965,  Health Coverage Exemptions and Instructions

Depending upon the type of exemption you have, you’ll either fill out Part I, Part II, or Part III.

Part I. Marketplace-Granted Coverage Exemptions for Individuals:

If you or a member of your tax household have an exemption granted by the Marketplace, complete Part I

Line 1-6 Name, SSN, and ECN. Here you will report each person and the Electronic Confirmation Number (ECN) you received when you claimed your exemption through the marketplace. If you didn’t need to apply for an exemption, you’d claim that in the next section.

Part II. Coverage Exemptions for Your Household Claimed on Your Return:

Line 7 Income below filing threshold. You’ll use line 7 a and b to report that you are claiming an exemption because you are below the tax filing threshold. A is for regular exemptions based on income, B is for a hardship exemption based on income.

Part III. Coverage Exemptions for Individuals Claimed on Your Return:

If you or a member of your tax household are claiming an exemption on your return, complete Part III.

Here you will report an exemption that doesn’t require an Electronic Confirmation Number for each month, or if applicable, the full year.

This chart shows all of the coverage exemptions available for 2016 (exemptions for Jan 1, 2016, to Dec 31, 2016). Exemptions typically don’t change much year-to-year. See additional content on this page for more information on specific exemptions types and how to apply for them. You can also see our ObamaCare exemptions list for a basic overview.

How to Make the Shared Responsibility Payment

There is no Shared Responsibility Form. The amount is derived from the Shared Responsibility Payment Worksheet, found on Page 5 of form 8965 instructions, and is simply reported on line 61 of your 1040.

This is the last ACA-related thing you will fill out since it requires knowing information from other forms first. The image below is a draft. The actual instructions have not yet been released.

TIP: The worksheet below is a draft, you can find this year’s sheet on page 5 of the instructions as noted above.


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