Individual Shared Responsibility Provision
The individual shared responsibility provision requires taxpayers to do at least one of the following:
- Have qualifying health coverage called minimum essential coverage
- Qualify for a health coverage exemption
- Make a shared responsibility payment with their federal income tax return for the months that without coverage or an exemption.
Under the recently enacted Tax Cuts and Jobs Act, taxpayers must continue to report coverage, qualify for an exemption, or pay the individual shared responsibility payment for tax years 2017 and 2018.
For Tax Year 2017, the IRS will not consider a return complete and accurate if the taxpayer does not report full-year coverage, claim a coverage exemption, or report a shared responsibility payment on the tax return.Most taxpayers have qualifying health coverage for all 12 months in the year, and will check the “Full-year coverage” box on their tax return. Taxpayers who do not have full-year coverage will indicate whether they qualify for a coverage exemption or owe a shared responsibility payment.
Find out if you’re eligible for a coverage exemption or must make a payment by using our interactive tool, Am I eligible for a coverage exemption or required to make an Individual Shared Responsibility Payment?.
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Here is a chart we found helpful in assisting what to look for, where to go, and what you will be receiving in the mail.
|Are a U.S. citizen or a non-U.S. citizen living in the United States
|Must have qualifying health care coverage, qualify for a health coverage exemption, or make a payment when you file your income tax return.
|Had coverage or an employer offered coverage to you in the previous year
|Will receive one or more of the following forms;
This information will help you complete your tax return.
|Had health coverage through an employer or under a government program (such as Medicare, Medicaid and coverage for veterans) for the entire year
|Just have to check the full-year coverage box on your Form 1040 series return and do not have to read any further.
|Did not have coverage for any month of the year
|Should check the instructions to Form 8965, Health Coverage Exemptions, to see if you are eligible for an exemption.
|Were eligible for an exemption from coverage for a month
|Must claim the exemption or report an exemption already obtained from the Marketplace by completing Form 8965, Health Coverage Exemptions, and submitting it with your tax return.
|Did not have coverage and were not eligible for an exemption from coverage for any month of the year
|Are responsible for making an individual shared responsibility payment when you file your return.
|Are responsible for making an individual shared responsibility payment
|Will report it on your tax return and make the payment with your income taxes.
|Need qualifying health care coverage for the current year
|Can visit HealthCare.gov to find out about the dates of open and special enrollment periods for purchasing qualified health coverage.
|Enroll in health insurance through the Marketplace for yourself or someone else on your tax return.
|Might be eligible for the premium tax credit.
|Received the benefit of more advance payments of the premium tax credit than the amount of credit for which you qualify on your tax return
|Will repay the amount in excess of the credit you are allowed subject to a repayment cap.
|Did not enroll in health insurance from the Marketplace for yourself or anyone else on your tax return
|Cannot claim the premium tax credit.
|Are eligible for the premium tax credit
|Can choose when you enroll in coverage to get premium assistance sent to your insurer each month to lower your monthly payments or get all the benefit of the credit when you claim it on your tax return.
|Are claiming the premium tax credit and did not benefit from advance payments of the premium tax credit
|Must file a tax return and IRS Form 8962, Premium Tax Credit (PTC) and claim the credit on the line labeled “Net premium tax credit.”
|Choose to get premium assistance when you enroll in Marketplace coverage
|Will have payments sent on your behalf to your insurance provider. These payments are called advance payments of the premium tax credit.
|Get the benefit of advance payments of the premium tax credit and experience a significant life change, such as a change in income or marital status
|Should report these changes in circumstances to your Marketplace when they happen.
|Get the benefit of advance payments of the premium tax credit
|Will report the payments on your tax return and reconcile the amount of the payments with the amount of credit for which you are eligible.