Taxpayers still trying to muddle through their 2014 tax return may need a little help when it comes to Form 8965 Health Coverage Exemptions. Some 20 different exemptions to the health insurance mandate are available to taxpayers. They can be claimed on the tax return or through the Health Insurance Marketplace. Regardless of where you get the Obamacare exemptions, you’ll need to fill out Form 8965 when you file your taxes. So, let’s breakdown this form. 

Part I – Marketplace-Granted Coverage Exemptions

This section applies only to taxpayers who have an exemption through the Marketplace. That includes taxpayers claiming certain hardship exemptions and members of recognized religious groups who object to insurance. Taxpayers approved for these exemptions should have received an Exemption Certificate Number (ECN) by mail. If you have not yet received your ECN, you can still file your tax return. Simply write “pending” in the ECN box. Just be aware, on the off-chance you don’t qualify, you may have to file an amended tax return.

For more about hardship exemption, check out our blog, How to Apply for Obamacare Exemptions Part I.

Part II – Coverage Exemptions for Your Household Claimed on Your Return

Part II is solely for taxpayers claiming an exemption because their total household income or gross income is below the tax-filing threshold. This exemption covers your entire tax family, and will be granted for the entire tax year. Typically, people in this group are not required to file a tax return. However, an ACA exception exists for those who received an Advanced Premium Tax Credit (APTC). Any taxpayer who received an APTC must file a tax return and complete Form 8962 Premium Tax Credit. If you don’t complete a tax return because you have no filing requirement, then this exemption is generally automatic. However, if you complete a tax return for another reason, such as to claim tax withholding or earned income tax credit, then you should complete this section of the form.

Part III – Coverage Exemptions for Individuals Claimed on Your Return

If you’re able to claim an exemption on your tax return, you’ll need to complete Part III. Some examples include Native Americans, members of health-care sharing ministries, or incarcerated individuals. Some of these exemptions last a lifetime, such as the exemption for Native Americans, while others have a limited duration.

For more information on these exemptions, check out How to Apply for Obamacare Exemptions Part II.

If you need help, visit a tax preparer at your local Liberty Tax® office. To learn about other new ACA tax forms, check out


-- By Alice Robeson