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IRS.gov Website
Instructions for Form 8965
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Types of Coverage Exemptions(p2)

rule
The Types of Coverage Exemptions chart shows the types of coverage exemptions available and whether the coverage exemption may be granted by the Marketplace, claimed on your tax return, or both. If you are claiming a coverage exemption in Part III, the right-hand column of the chart shows which code you should enter in column (c) to claim that particular coverage exemption.
taxtip
If you are eligible for a coverage exemption for 2015 that can be claimed on the tax return, claim it in Part II or Part III even if it can be granted by the Marketplace.
If the coverage exemption can be granted only by the Marketplace (for example, a coverage exemption based on membership in certain religious sects or certain hardship exemptions), apply to the Marketplace for that coverage exemption before filing your tax return. If the Marketplace hasn't processed your application before you file your tax return, complete Part I and enter pending in column (c) for each individual listed.
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Types of Coverage Exemptions

This chart shows all of the coverage exemptions available for 2015, including information about where the coverage exemptions can be obtained and the code for the coverage exemption that is to be used on Form 8965 when you claim the exemption. If your coverage exemption was granted by the Marketplace, you will need to enter the Exemption Certificate Number (ECN) provided by the Marketplace (see the instructions for Part I).

Coverage ExemptionGranted by MarketplaceClaimed on tax returnCode for Exemption
Income below the filing threshold—Your gross income or your household income was less than your applicable minimum threshold for filing a tax return.  No Code
See Part II
Coverage considered unaffordable—The minimum amount you would have paid for premiums is more than 8.05% of your household income.  A
Short coverage gap—You went without coverage for less than 3 consecutive months during the year.  B
Citizens living abroad and certain noncitizens—You were:
  • A U.S. citizen or a resident alien who was physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months;
  • A U.S. citizen who was a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year;
  • A bona fide resident of a U.S. territory;
  • A resident alien who was a citizen or national of a foreign country with which the U.S. has an income tax treaty with a nondiscrimination clause, and you were a bona fide resident of a foreign country for an uninterrupted period that includes an entire tax year;
  • Not lawfully present in the U.S and not a U.S. citizen or U.S. national. For more information about who is treated as lawfully present in the U.S. for purposes of this coverage exemption, visit www.HealthCare.gov; or
  • A nonresident alien, including (1) a dual-status alien in the first year of U.S. residency and (2) a nonresident alien or dual-status alien who elects to file a joint return with a U.S. spouse. This exemption doesn't apply if you are a nonresident alien for 2015, but met certain presence requirements and elected to be treated as a resident alien. For more information see Pub. 519.
 C
Members of a health care sharing ministry—You were a member of a health care sharing ministry. D
Members of Indian tribes—You were either a member of a Federally-recognized Indian tribe, including an Alaska Native Claims Settlement Act (ANCSA) Corporation Shareholder (regional or village), or you were otherwise eligible for services through an Indian health care provider or the Indian Health Service. E
Incarceration—You were in a jail, prison, or similar penal institution or correctional facility after the disposition of charges. F
Aggregate self-only coverage considered unaffordable—Two or more family members' aggregate cost of self-only employer-sponsored coverage was more than 8.05% of household income, as was the cost of any available employer-sponsored coverage for the entire family.  G
Resident of a state that did not expand Medicaid—Your household income was below 138% of the federal poverty line for your family size and at any time in 2015 you resided in a state that didn't participate in the Medicaid expansion under the Affordable Care Act.  G
Member of tax household born, adopted, or died—During 2015 a child was added to your tax household by birth or adoption, or a member of your tax household died during the year, and you can't check the full-year coverage checkbox on your tax return.  H
Members of certain religious sects—You are a member of a recognized religious sect.  Need ECN
See Part I
Determined ineligible for Medicaid in a state that didn't expand Medicaid coverage—You were determined ineligible for Medicaid solely because the state in which you resided didn't participate in Medicaid expansion under the Affordable Care Act.  Need ECN
See Part I
General hardship—You experienced a hardship that prevented you from obtaining coverage under a qualified health plan.  Need ECN
See Part I
Coverage considered unaffordable based on projected income—You didn't have access to coverage that is considered affordable based on your projected household income.  Need ECN
See Part I
Unable to renew existing coverage—You were notified that your health insurance policy was not renewable and you considered the other plans available to be unaffordable.  Need ECN
See Part I
Certain Medicaid programs that are not minimum essential coverage—You were (1) enrolled in Medicaid coverage provided to a pregnant woman that is not recognized as minimum essential coverage; (2) enrolled in Medicaid coverage provided to a medically needy individual (also known as Spend-down Medicaid or Share-of-Cost Medicaid) that is not recognized as minimum essential coverage; or (3) enrolled in Medicaid, and received minimum essential coverage for one or more months of the year by meeting a spend-down, but not in other months because the spend-down had not been met.  Need ECN
See Part I
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Definitions(p2)

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Tax household.(p2)
rule
For purposes of Form 8965, your tax household generally includes you, your spouse (if filing a joint return), and any individual you claim as a dependent on your tax return. It also generally includes each individual you can, but don't, claim as a dependent on your tax return. To find out if you can claim someone as your dependent, see Exemptions for Dependents in Pub. 501, Exemptions, Standard Deduction, and Filing Information, or Line 6c—Dependents in the instructions for Form 1040 or Form 1040A.
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Birth, death, or adoption.(p2)
An individual is included in your tax household in a month only if he or she is alive for the full month. Also, if you adopt a child during the year, the child is included in your tax household only for the full months that follow the month in which the adoption occurs. If each individual who is a member of your tax household for any month had coverage for all the months they were members of your tax household, check the Full-year coverage checkbox on your return. For information on how to identify months during which an individual was not a member of your tax household for one of these reasons, see Member of tax household born, adopted, or died in Part III, later. You don't need to file Form 8965 solely to identify these months.
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Dependents of more than one taxpayer.(p2)
Your tax household doesn't include someone you can, but don't, claim as a dependent if the dependent is properly claimed on another taxpayer's return or can be claimed by a taxpayer with higher priority under the tie-breaker rules described in Pub. 501.
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Household income.(p2)
rule
You will need to calculate your household income:
For purposes of Form 8965, your household income is your modified adjusted gross income (MAGI) plus the MAGI of each individual in your tax household whom you claim as a dependent if that individual is required to file a tax return because his or her income meets the income tax return filing threshold. Use the Filing Requirements for Children and Other Dependents chart to determine whether your dependent is required to file his or her own tax return.
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Modified adjusted gross income (MAGI).(p2)
rule
For purposes of Form 8965, your MAGI is your adjusted gross income plus certain other items from your tax return.
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If you file Form 1040.(p2)
If you file Form 1040, figure your MAGI by adding the amounts reported on Form 1040, lines 8b and 37. If you claimed the foreign earned income exclusion, housing exclusion, or housing deduction, add the amounts from Form 2555, lines 45 and 50, or Form 2555-EZ, line 18. If your dependent has a filing requirement, but you elect to report the dependent's income on Form 8814, include the dependent's MAGI in the household income by adding Form 8814, line 1b and the smaller of Form 8814, line 4 or 5.
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If you file Form 1040A.(p2)
If you file Form 1040A, figure your MAGI by adding the amounts on Form 1040A, lines 8b and 21.
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If you file Form 1040EZ.(p2)
If you file Form 1040EZ, figure your MAGI by adding the amount on Form 1040EZ, line 4 and any tax-exempt interest reported in the space to the left of line 2.
taxtip
You can use Step 3 under Shared Responsibility Payment, later, to figure your household income.
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Filing Requirements for Children and Other Dependents

Use this chart to help you determine if a dependent you claimed on your return must file his or her own tax return. If the dependent is required to file a tax return because his or her income meets the filing threshold the dependent's MAGI must be included in household income for purposes of Form 8965, even if you elect to report that dependent's income on Form 8814. Do not include a dependent's MAGI in household income if the dependent's income is below the filing threshold, even if he or she chooses to file a return for another reason.

taxtip In this chart, unearned income includes taxable interest, ordinary dividends, and capital gain distributions. It also includes unemployment compensation, taxable social security benefits, pensions, annuities, and distributions of unearned income from a trust. Earned income includes salaries, wages, tips, professional fees, and taxable scholarship and fellowship grants. Gross income is the total of your unearned and earned income.
Single dependents. Was your dependent either age 65 or older or blind?
  box No. Your dependent must file a return if any of the following apply.
  
  • His or her unearned income was over $1,050.
  • His or her earned income was over $6,300.
  • His or her gross income was more than the larger of—
   
  • $1,050, or
  • His or her earned income (up to $5,950) plus $350.
  box Yes. Your dependent must file a return if any of the following apply.
  
  • His or her unearned income was over $2,600 ($4,150 if 65 or older and blind).
  • His or her earned income was over $7,850 ($9,400 if 65 or older and blind).
  • His or her gross income was more than the larger of—
   
  • $2,600 ($4,150 if 65 or older and blind), or
  • His or her earned income (up to $5,950) plus $1,900 ($3,450 if 65 or older and blind).
Married dependents. Was your dependent either age 65 or older or blind?
  box No.Your dependent must file a return if any of the following apply.
  
  • His or her unearned income was over $1,050.
  • His or her earned income was over $6,300.
  • His or her gross income was at least $5 and his or her spouse files a separate return and itemizes deductions.
  • His or her gross income was more than the larger of—
   
  • $1,050, or
  • His or her earned income (up to $5,950) plus $350.
  box Yes. Your dependent must file a return if any of the following apply.
  
  • His or her unearned income was over $2,300 ($3,550 if 65 or older and blind).
  • His or her earned income was over $7,550 ($8,800 if 65 or older and blind).
  • His or her gross income was at least $5 and his or her spouse files a separate return and itemizes deductions.
  • His or her gross income was more than the larger of—
   
  • $2,300 ($3,550 if 65 or older and blind), or
  • His or her earned income (up to $5,950) plus $1,600 ($2,850 if 65 or older and blind).
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Marketplace.(p2)
rule
A Marketplace, or Health Insurance Marketplace (also referred to as an Exchange), is a governmental agency or nonprofit entity that makes qualified health plans available to individuals and grants certain coverage exemptions. The term “Marketplace” refers to state Marketplaces, regional Marketplaces, subsidiary Marketplaces, and the Federally-facilitated Marketplace.
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Minimum essential coverage.(p3)
rule
Minimum essential coverage is health coverage that satisfies the requirement for individuals to have health coverage. Minimum essential coverage generally includes coverage under a government-sponsored program, coverage from your employer, and coverage under certain plans that you buy in the individual market. If you, or a member of your family, had minimum essential coverage in 2015, the entity that provided the coverage may have sent you a Form 1095-A, 1095-B, or 1095-C, that lists individuals in your family who were enrolled in minimum essential coverage and shows their months of coverage. Individuals enrolled in a qualified health plan through the Marketplace generally receive this information on Form 1095-A, Health Insurance Marketplace Statement. Individuals enrolled in health insurance coverage outside the Marketplace, in a government-sponsored program, or in certain other coverage generally receive this information on Form 1095-B, Health Coverage. Individuals enrolled in self-insured coverage from an employer generally receive Form 1095-C, Employer-Provided Health Insurance Offer and Coverage. For more information on these forms, see the instructions for Form 1040, line 61; Form 1040A, line 38; or Form 1040EZ, line 11. The Types of Minimum Essential Coverage chart provides more information about the plans and arrangements that are minimum essential coverage.
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Timing.(p4)
You are considered to have minimum essential coverage for a month if you have it for at least 1 day during that month. For example, if you start a new job on June 26 and are covered under your employer’s plan starting on that day, you are treated as having coverage for the entire month of June.
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Foreign coverage.(p4)
In general, coverage provided by a foreign employer to its employees and related individuals is minimum essential coverage. Individuals with such coverage should see Pub. 974, Premium Tax Credit (PTC). However, coverage that an individual purchases directly from a foreign health insurance issuer or that is provided by the government of a foreign country doesn't qualify as minimum essential coverage unless it's recognized as minimum essential coverage by the Department of Health and Human Services (HHS). To find out if HHS has recognized particular forms of foreign coverage as minimum essential coverage, go to www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/minimum-essential-coverage.html, and scroll down and click on the link for the list of approved plans.
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Coverage for business owners.(p4)
Minimum essential coverage includes coverage provided to a business owner (such as a partner or sole proprietor) under a plan that is eligible employer-sponsored coverage with respect to at least one employee.
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Types of Minimum Essential Coverage

Minimum essential coverage means health care coverage under any of the following programs. It does not, however, include coverage consisting solely of excepted benefits. Excepted benefits include stand-alone vision and dental plans (except pediatric dental coverage), workers' compensation coverage, and coverage limited to a specified disease or illness.
Employer-sponsored coverage:
 
  • Group health insurance coverage for employees under—
  
  • A governmental plan, such as the Federal Employees Health Benefit program
  • A plan or coverage offered in the small or large group market within a state
  • A grandfathered health plan offered in a group market
 
  • A self-insured health plan for employees
  • COBRA coverage
  • Retiree coverage
  • Coverage under an expatriate health plan for employees
Individual health coverage:
 
  • Health insurance you purchase directly from an insurance company
  • Health insurance you purchase through the Marketplace
  • Health insurance provided through a student health plan
  • Catastrophic plans
  • Coverage under an expatriate health plan for non-employees such as students and missionaries
Coverage under government-sponsored programs:
 
  • Medicare Part A coverage
  • Medicare Advantage plans
  • Most Medicaid coverage*
  • Children's Health Insurance Program (CHIP) coverage
  • Most types of TRICARE coverage
  • Comprehensive health care programs offered by the Department of Veterans Affairs
  • Health coverage provided to Peace Corps volunteers
  • Department of Defense Nonappropriated Fund Health Benefits Program
  • Refugee Medical Assistance
  • Coverage through a Basic Health Program (BHP) standard health plan
Other coverage:
 
  • Certain foreign coverage
  • Certain coverage for business owners
  • Coverage recognized by HHS as minimum essential coverage.**
*Medicaid programs that provide limited benefits generally don't qualify as minimum essential coverage; however, HHS will provide a hardship exemption to individuals with certain types of limited-benefit Medicaid coverage.
**Plans recognized as minimum essential coverage are listed at: www.cms.gov/CCIIO/Programs-and-Initiatives/Health-Insurance-Market-Reforms/minimum-essential-coverage.html, scroll down and click on the link for the list of approved plans.