How-To-Apply-For-Obamacare-Exemptions-Part-IILast week, we went over Obamacare exemptions that must be applied for through the mail. There are several other exemptions which can be claimed directly on the tax return. If you qualify, enter the code directly onto Form 8965, Part III, column C.


Exemptions Claimed on the Tax Return 




Exemption Description

How to Prove


No Code

Use Part II of Form 8965

Household income not high enough to be required to file a tax return



The lowest cost plan available through the health care Marketplace costs more than 8% of your household income

Complete Affordability Worksheets


Short gap in health insurance coverage = less than 3 months long



  • Citizens living abroad and certain non-citizens 
  • Lived outside of the U.S. for 330 days of the year 
  • U.S. citizen and bona fide resident of foreign country or U.S. territory 
  • Not lawfully present in the U.S., but file taxes using an ITIN

ITIN holders will add their ITIN to the tax return


Member of a long-standing federally recognized health-care sharing ministry, such as:

  • Christian Health Ministries 
  • Liberty Healthshare 
  • Medi-share 
  • Samaritan Ministries 
  1. Name of ministry,
  2. District and address of congregation, and
  3. Membership dates  


Member of a Federally recognized Indian Tribe, including Alaska Natives, or eligible to use Indian Health Services



You were in jail, prison, or another correctional facility for at least one day of the month you went without coverage



Meet all three of the following:

  1. You earn too much to qualify for Medicaid, but
  2. Not enough to qualify for health insurance subsidies, and
  3. Your state did not expand Medicaid eligibility. 



If you are audited, the IRS may request additional documentation to confirm your qualification. Find out if you can qualify and apply for an exemption from the penalty by using our Online Health Insurance Exemption Guide. Visit your local Liberty Tax® office for a FREE ACA review, or call the ACA Hotline at 1-800-673-8600 to speak with a Liberty Tax Service® ACA specialist.

Don't qualify for any of these? Check out How to Apply For Obamacare Exemptions Part I.


-- By Alice Robeson