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Navigating the complexities of health coverage can be daunting, especially when it comes to tax season. The IRS Form 8965 is a crucial document that plays a significant role in the health care landscape, particularly for those seeking exemptions from the Affordable Care Act (ACA) requirements. This form is essential for individuals and households claiming a coverage exemption, whether granted by the Health Insurance Marketplace or based on specific criteria that allow them to bypass the requirement for health insurance. By completing Form 8965, you clarify your tax situation and assert your entitlement to exemptions based on your unique circumstances, such as income levels or health insurance availability. The form includes distinct sections that help both the taxpayer and the IRS understand the specifics of these exemptions. Part I focuses on Marketplace-granted exemptions, while Part II allows individuals to make claims based on their household income. Furthermore, Part III is dedicated to documenting exemptions claimed on the return for each member of the household. Understanding and accurately completing this form ensures you remain compliant with tax regulations while taking advantage of the options available to you.

Irs 8965 Example

Form 8965

Health Coverage Exemptions

OMB No. 1545-0074

 

2018

Department of the Treasury

Attach to Form 1040.

Go to www.irs.gov/Form8965 for instructions and the latest information.

Attachment

Internal Revenue Service

Sequence No. 75

Name as shown on return

 

Your social security number

 

 

 

 

Complete this form if you have a Marketplace-granted coverage exemption or you are claiming a coverage exemption on your return.

 

 

Marketplace-Granted Coverage Exemptions for Individuals. If you and/or a member of your tax household

Part I

have an exemption granted by the Marketplace, complete Part I.

 

 

 

 

 

 

(a)

(b)

(c)

 

 

Name of Individual

SSN

Exemption Certificate Number

 

 

 

 

 

1

 

 

 

 

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Part II

Coverage Exemptions Claimed on Your Return

for Your Household

 

7If you are claiming a coverage exemption because your household income or gross income is below the filing threshold,

 

check here

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Coverage Exemptions Claimed on Your Return for Individuals. If you and/or a member of your tax

 

Part III

 

household are claiming an exemption on your return, complete Part III.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

(b)

(c)

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(g)

(h)

(i)

(j)

(k)

(l)

(m)

(n)

(o)

(p)

 

 

Exemption

Full

 

 

 

Name of Individual

SSN

Jan

Feb

 

Mar

Apr

May

June

July

Aug

Sept

Oct

Nov

Dec

 

 

Type

Year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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For Privacy Act and Paperwork Reduction Act Notice, see your tax return instructions.

 

 

Cat. No. 37787G

 

 

Form

8965

(2018)

File Breakdown

Fact Name Description
Purpose of Form Form 8965 is used to claim a coverage exemption from the Affordable Care Act's individual mandate. It must be attached to your Form 1040 when filing your federal tax return.
Marketplace-Granted Exemptions If you or a member of your household received a coverage exemption approved by the Health Insurance Marketplace, you must complete Part I of Form 8965 with the relevant details.
Income-Based Exemptions You can claim an exemption on your tax return if your household income is below the required filing threshold. This is documented by checking a specific box in Part II of the form.
Required Information The form requires personal information such as the names and Social Security Numbers of individuals in your tax household. It also includes sections for listing exemption certificate numbers.
Year of Use This version of Form 8965 is applicable for the tax year 2018, which is essential as forms can change from year to year.

Guide to Using Irs 8965

After gathering your information, you are ready to fill out IRS Form 8965, which is required for claiming health coverage exemptions. This form must be attached to your Form 1040 when you file your taxes. Follow these steps to accurately complete the form.

  1. Begin by writing your name and Social Security number at the top of the form as it appears on your tax return.
  2. If you have a Marketplace-granted coverage exemption, proceed to Part I. Fill in the names, social security numbers, and exemption certificate numbers for each individual granted an exemption.
  3. Next, move on to Part II. If your household income is below the filing threshold, check the appropriate box to indicate this exemption.
  4. Then, in Part III, you will list any coverage exemptions claimed for your household members. For each individual, provide their full name and social security number, filling in the appropriate month(s) for which they are exempt.
  5. Complete the exemption type for each individual if applicable. Ensure every section is filled accurately to avoid delays in processing your return.
  6. Once finished, review all entries for accuracy and completeness before attaching Form 8965 to your Form 1040.

Get Answers on Irs 8965

What is Form 8965?

Form 8965 is used to claim health coverage exemptions when filing your federal tax return. It is specifically for individuals who are granted a coverage exemption by the Health Insurance Marketplace or who are qualifying for an exemption based on certain criteria. This form should be attached to your Form 1040.

Who needs to file Form 8965?

If you and/or a member of your tax household have received a coverage exemption from the Marketplace, you must complete Form 8965. Additionally, if you are claiming an exemption on your tax return due to income or other qualifying reasons, you’ll need this form as well.

What types of exemptions can I claim?

There are various exemptions you can claim, including:

  • Marketplace-granted exemptions
  • Income below the filing threshold
  • Other specific individual exemptions

Each exemption has specific criteria you need to meet, so make sure to check them out before filing.

How do I obtain an exemption certificate?

If you got an exemption from the Marketplace, you would have received an exemption certificate number. This number is necessary for completing Form 8965. If you did not receive one, you should contact the Marketplace for assistance.

What information do I need to fill out Form 8965?

You will need the following information:

  1. Your name and Social Security Number (SSN)
  2. For each household member claiming an exemption, their name and SSN
  3. The exemption certificate number (if applicable)
  4. Details on the type of exemption being claimed

What if my income is below the filing threshold?

If your income or gross income is below the filing threshold, you can claim an exemption by checking the appropriate box on Form 8965. This indicates that you do not need to file a tax return due to your income level.

How do I submit Form 8965 with my tax return?

Form 8965 must be attached to your Form 1040 when you file your tax return. Ensure that all information is accurate and complete to avoid any delays or issues with your return.

Can I file Form 8965 electronically?

Yes, you can file Form 8965 electronically if you are using tax preparation software. Make sure the software you choose supports Form 8965. Typically, if you are e-filing your Form 1040, Form 8965 can be included in the same submission.

Where can I find more information about Form 8965?

For the most current instructions and additional information about Form 8965, visit the IRS website at www.irs.gov/Form8965. This site includes valuable resources to help you understand the form and how to complete it correctly.

Common mistakes

When filling out Form 8965 for health coverage exemptions, one common mistake is failing to include the necessary information about each individual in the tax household. Every person who qualifies for an exemption needs to be listed accurately in Part I or Part III of the form. Omitting names or Social Security numbers can lead to delays in processing or denial of the exemption claim.

Another frequent oversight is not checking the correct boxes related to the exemptions being claimed. For example, if an individual's income is below the filing threshold, it is critical to check the appropriate box in Part II. Neglecting to do so can create confusion and may result in the IRS assuming there is no exemption being claimed, potentially leading to penalties.

Additionally, individuals might enter information incorrectly. For instance, typing errors in Social Security numbers or exemption certificate numbers can cause significant issues. Errors in these numbers can prevent the IRS from verifying the exemption and thus lead to complications during tax processing.

Lastly, forgetting to sign or date the form can be a simple yet detrimental mistake. Each taxpayer must ensure that they sign the form before submitting it along with their tax return. A missing signature may render the form invalid and could result in the IRS rejecting the claimed exemptions.

Documents used along the form

The IRS Form 8965 is vital for individuals who are claiming health coverage exemptions when filing their taxes. Along with this form, several other documents may be required to support your claims and ensure compliance with tax regulations. Below is a list of additional forms and documents frequently used alongside Form 8965, each playing a unique role in the process.

  • Form 1040: This is the main individual income tax return form used by U.S. taxpayers. It's where you report your income, claim deductions, and calculate your tax liability.
  • Form 1095-A: This form is provided by the Health Insurance Marketplace. It shows details about your health coverage and is necessary for individuals who are claiming exemptions based on their Marketplace coverage.
  • Form 1095-B: Issued by health insurers, this form confirms that you and your dependents had health coverage during the tax year. It helps verify compliance with the Affordable Care Act.
  • Form 1095-C: Employers using this form report health insurance coverage offered to employees. It’s crucial for those relying on employer-sponsored health plans.
  • Schedule A (Form 1040): If you are itemizing deductions, this schedule is essential for listing qualifying medical expenses and potentially claiming a premium tax credit.
  • Form 8862: If you are claiming a refund of an excess premium tax credit in a prior year, this form must be filed to claim the credit for the current tax year.
  • Form 8962: This form is used to claim the premium tax credit if you had Marketplace coverage. It helps reconcile any advance payments of the premium tax credit.
  • Form 4506-T: If you need to request a transcript of your tax return, this form can provide proof of income or filing status to assist with claims.

Understanding these forms and how they relate to IRS Form 8965 can make the tax filing process less daunting. Make sure to gather all necessary documents to ensure a smooth and accurate filing experience.

Similar forms

  • Form 1040: This is the main tax return form used by individuals. Like Form 8965, it is used to report income and calculate the tax owed. They are both essential for determining a taxpayer's financial situation during the filing process.

  • Form 1095-A: This form provides information about health insurance coverage obtained through the Health Insurance Marketplace. Similar to Form 8965, it helps taxpayers establish their health coverage and any exemptions related to it.

  • Form 1095-B: Issued by health insurance providers, this form confirms that individuals had minimum essential coverage. Like Form 8965, it relates to health coverage and substantiates exemptions claimed.

  • Form 1095-C: Employers provide this form to report health coverage offered to their employees. It shares a similar purpose with Form 8965 by providing information needed to claim health coverage exemptions.

  • Form 8862: This form is used to claim a refund of the Earned Income Tax Credit after previously being disqualified. Like Form 8965, it requires supporting information to validate tax claims.

  • Form 8867: Known as the Paid Preparer’s Due Diligence Checklist, this form ensures tax preparers meet requirements for claims like the Earned Income Tax Credit. Like Form 8965, it helps in verifying claimed exemptions or credits.

  • Form 4506-T: This is a request for a transcript of tax return information. It can assist in verifying information needed for tax completeness, similar to how Form 8965 verifies health coverage exemptions.

  • Schedule A: Used to itemize deductions, this schedule affects taxable income. Both Schedule A and Form 8965 serve functions that impact overall tax liability.

  • Schedule SE: This form is for self-employment tax, useful for reporting additional income sources. Like Form 8965, it is part of the documents needed to complete a tax return accurately.

  • Form 8949: This form is for reporting capital gains and losses. Both it and Form 8965 involve reporting specific circumstances that affect tax obligations.

Dos and Don'ts

When filling out the IRS Form 8965, there are important considerations to keep in mind. Below is a list of things you should and shouldn't do.

  • Do: Carefully read all instructions for Form 8965 on the IRS website.
  • Do: Provide accurate personal information, including your name and Social Security number.
  • Do: Ensure that any exemption granted by the Marketplace is properly documented.
  • Do: Fill out both Part I and Part III if applicable to your situation.
  • Do: Check the box if your household income is below the filing threshold when relevant.
  • Don't: Skip completing any applicable sections of the form.
  • Don't: Use outdated information or forms from previous years.
  • Don't: Assume that errors can be fixed later; double-check your entries now.
  • Don't: Forget to attach Form 8965 to your Form 1040 when submitting your return.
  • Don't: Leave out important details such as exemption certificate numbers or corresponding months.

Misconceptions

Understanding the IRS Form 8965 can often be challenging, leading to several misconceptions. Here are nine common misunderstandings about this form:

  • Only low-income individuals need to file Form 8965. Many believe only those with a low income must submit this form. In reality, it is necessary for anyone claiming a coverage exemption, regardless of income level.
  • You can't get an exemption if you have health insurance. Some think that having health insurance disqualifies them from claiming an exemption. However, this form is specifically for those who have been granted exemptions by the Marketplace or meet other criteria.
  • Form 8965 is only for individuals. This assumption overlooks the fact that entire households can claim exemptions. If any member of the household qualifies, it’s possible for the whole family to be covered.
  • Filing Form 8965 is optional. This misconception suggests that the form is just a suggestion. In truth, if qualifying exemptions exist, filing it with your tax return is a requirement to avoid penalties.
  • It's difficult to get a Marketplace exemption. Many people think obtaining a Marketplace exemption is too complicated. In fact, the process is straightforward, and the Marketplace has resources to assist with applications.
  • Once granted an exemption, you don’t need to prove it. Some believe that an exemption means they never have to provide proof. However, maintaining documentation is crucial, as it may be required for verification later.
  • Form 8965 applies to everyone every year. People might assume they need to file this form annually. However, if no exemptions apply in a given year, filing may not be necessary.
  • The form only applies to the previous tax year. Many individuals incorrectly think that once a tax year is over, the form no longer matters. In reality, it can apply to any tax year where exemptions are relevant.
  • Form 8965 is not important for my tax return. Some underestimate the importance of this form. Failing to include it when necessary can lead to additional tax liability or penalties, making it significant for accurate tax reporting.

Clarifying these misconceptions can help individuals navigate the tax process with confidence and ensure compliance with IRS regulations.

Key takeaways

Here are some key takeaways on filling out and using the IRS Form 8965:

  • Form Purpose: Use Form 8965 to claim a health coverage exemption. This is necessary if you received an exemption from the Marketplace or if you are filling one out for your tax return.
  • Attachment Requirement: Always attach this form to your Form 1040 when filing your taxes. It's essential for ensuring that your coverage exemption is processed properly.
  • Complete the Correct Parts: Fill out Part I if you have Marketplace-granted exemptions. Use Part III if you’re claiming exemptions based on your household income or other specific criteria.
  • Personal Information: Provide accurate details for each individual listed. This includes names, Social Security numbers, and exemption certificate numbers when applicable.
  • Stay Updated: Check the IRS website for the latest updates and instructions regarding Form 8965. Regulations may change, and it's important to have the most current information.