First full-year no insurance for the whole family

[ILLMAS]

I just want to make sure form is 8965 is correct, form came out blank, the worksheet is not part of the form somehow?

[Pacun]

Open the form and then go to part III (I think)... pull down each name and check each month they don't have insurance. While doing that, you will get a huge penalty but it will be 95 per head when you are ready to close it.

 

Don't click on the exemption box (yes no).

Edited February 3, 2015 by Pacun

[ILLMAS]

The penalty is correct according to the worksheet, in this case it's a family of 3, one adult and two kids under 18, total penalty is $195.00, kids are elementary students and don't work, total income for the family is approx. $20K.

 

MAS

[Pacun]

I thought that a family of 3 with 20K income could check unaffordable and be exempted. I guess no one is exempted based on income.

[jklcpa]

Open the form and then go to part III (I think)... pull down each name and check each month they don't have insurance. While doing that, you will get a huge penalty but it will be 95 per head when you are ready to close it.

 

Don't click on the exemption box (yes no).

 

ILLMAS, you should only check the months without insurance AND for which they don't meet one of the the exemptions. It sounds like they should not owe any penalty.

[Lee B]

I thought that a family of 3 with 20K income could check unaffordable and be exempted. I guess no one is exempted based on income.

 

This family should be exempt for affordability. Actually this family probably qualifies for medicaid, unless they live in a state

 

that  refused the expanded medicaid provision, which may be an exemption in it's own right.

[ILLMAS]

Ok I went ahead and claimed unfordable and the penalty disappeared, but my concern is that TP did not get health insurance not because he couldn't afford it, he could of went with medicaid, but because he didn't know he had to have it.

[Lee B]

Ok I went ahead and claimed unfordable and the penalty disappeared, but my concern is that TP did not get health insurance not because he couldn't afford it, he could of went with medicaid, but because he didn't know he had to have it.

 

Yes, I have been scratching my head about that. If a taxpayer's MAGI is low enough that they qualify for

 

Medicaid and don't qualify for an ACA plan, but don't sign up for Medicaid, how do you handle that ?

Edited February 3, 2015 by cbslee

[Chowdahead]

This family should be exempt for affordability. Actually this family probably qualifies for medicaid, unless they live in a state

 

that  refused the expanded medicaid provision, which may be an exemption in it's own right.

 

 

I believe they may still owe a penalty.  The income is above the filing threshold.  They cannot claim coverage is unaffordable unless you figure out how much coverage for a family of in their count and determine if it exceeds the limits, which I doubt it does.  But really, are we as the preparer supposed to figure this out?  We'd have to charge more than what the penalty would be anyway.

 

The only exemption they may qualify for is if their state chose not to expand Medicaid.

 

But I think the way the exemptions are carefully worded, if a taxpayer chose not to obtain coverage either through Medicaid or the marketplace, they are penalized.

 

But this assuming the IRS is going to follow up on this morass of minutiae for over 350 million people....

[RitaB]

I believe they may still owe a penalty.  The income is above the filing threshold.  They cannot claim coverage is unaffordable unless you figure out how much coverage for a family of in their count and determine if it exceeds the limits, which I doubt it does.  

 

 

 

I think you are correct.  Check out the thread Affordability Exemption Test started by HV Ken.