Jack from Ohio Posted February 4, 2015 Report Share Posted February 4, 2015 One of the hardship exemptions allowed is "Filing bankruptcy within the last 6 months." When applying for the exemption certificate # on the marketplace, the client must send "Official bankruptcy filing documents" to support their request. Questions: 1. Does the 6 months refer to the last 6 months of 2014, or 6 months from the date the client is filing? 2. Does the reference to "Official bankruptcy filing documents" refer to the initial filing date of the bankruptcy, or would any of the follow-up documents such as the letter stating that all parts of the bankruptcy have been approved be acceptable. I know there can be a considerable lag between filing and final approval. I have searched and cannot find any guidance about these two items. Anyone else? Quote Link to comment Share on other sites More sharing options...
Janitor Bob Posted February 4, 2015 Report Share Posted February 4, 2015 I would say last 6 months of 2014 and a document that shows the filing date...because that document would prove that bankruptcy was filed in last 6 months of the year. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted February 4, 2015 Report Share Posted February 4, 2015 Some timeframes have to be within a certain time of the lack of insurance. Not sure about bankruptcy. But, if insurance gap was February - May, maybe the bankruptcy needs to be within six months before or after the gap, or during the gap. I have no idea. Charge him a bundle for research. Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 4, 2015 Report Share Posted February 4, 2015 Interesting question, the exemption is for the whole year correct? So, I would assume that if you filed after June 30th, 2013, you should be OK for the whole 2014. Certificate is only issue by the exchange, correct? Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 4, 2015 Author Report Share Posted February 4, 2015 Interesting question, the exemption is for the whole year correct? So, I would assume that if you filed after June 30th, 2013, you should be OK for the whole 2014. Certificate is only issue by the exchange, correct? Exemption certificate can only be acquired by filing a form, paper in the mail, requesting the hardship exemption. The information is specific about in the last 6 months. Quote Link to comment Share on other sites More sharing options...
jklcpa Posted February 4, 2015 Report Share Posted February 4, 2015 All sources I've read say to supply "official bankruptcy filing documents" from a date within the last 6 months. That sounds like from within the last 6 months immediately preceding the application being submitted. One of the confusing things about this is that the application for the exemption has a space for stating when the hardship began, so suppose the individual filed for bankruptcy on Feb 1st and entered that date as when the hardship began, but didn't file for the exemption until sometime in Sept, is he/she then out of luck for the exemption? Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 4, 2015 Author Report Share Posted February 4, 2015 All sources I've read say to supply "official bankruptcy filing documents" from a date within the last 6 months. That sounds like from within the last 6 months immediately preceding the application being submitted. One of the confusing things about this is that the application for the exemption has a space for stating when the hardship began, so suppose the individual filed for bankruptcy on Feb 1st and entered that date as when the hardship began, but didn't file for the exemption until sometime in Sept, is he/she then out of luck for the exemption? The exemption states that the bankruptcy must be filed in the last 6 months. My take is that it must be the date of the original filing of the bankruptcy, and must be within the last 6 months of 2014, the year for which the tax return applies. And the document necessary must be a copy of the original filing document from the courts. Therefore, if a person filed for bankruptcy on June 30, 2014, they could not use bankruptcy as a hardship exemption. However, I can't locate any substantiation or guidance from the IRS about this question. Quote Link to comment Share on other sites More sharing options...
jklcpa Posted February 4, 2015 Report Share Posted February 4, 2015 No, a person The exemption states that the bankruptcy must be filed in the last 6 months. My take is that it must be the date of the original filing of the bankruptcy, and must be within the last 6 months of 2014, the year for which the tax return applies. And the document necessary must be a copy of the original filing document from the courts. Therefore, if a person filed for bankruptcy on June 30, 2014, they could not use bankruptcy as a hardship exemption. However, I can't locate any substantiation or guidance from the IRS about this question. No, that is not correct. A person can file for an exemption due to bankruptcy at any point during the tax year on the marketplace, and if granted, the exemption will be for the remainder of that calendar year. From the marketplace: How long a hardship exemption lasts Hardship exemptions are usually provided for the month before the hardship, the months of the hardship, and the month after the hardship. However, the Marketplace may provide the exemption for additional months after the hardship, including up to a full calendar year. For a hardship exemption based on affordability, the exemption will be granted for the remaining months in the coverage year. For people ineligible for Medicaid only because a state hasn’t expanded Medicaid coverage, the hardship exemption will be granted for the whole calendar year. For people eligible for Indian Health Services, the hardship exemption will be granted on a continuing basis. It may be kept for future years without having to submit another application. This is true as long as there are no changes to your membership in a tribe or eligibility for services from an Indian health care provider. Quote Link to comment Share on other sites More sharing options...
Lee B Posted February 4, 2015 Report Share Posted February 4, 2015 Very interesting, because some people who file for bankruptcy don't end up jumping thru all the hoops and their bankruptcy never ends up finalized. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 4, 2015 Author Report Share Posted February 4, 2015 Very interesting, because some people who file for bankruptcy don't end up jumping thru all the hoops and their bankruptcy never ends up finalized The hardship exemption for bankruptcy specifically says "filed." You filed for bankruptcy in the last 6 months https://www.healthcare.gov/fees-exemptions/hardship-exemptions/ Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 4, 2015 Author Report Share Posted February 4, 2015 (edited) No, a person No, that is not correct. A person can file for an exemption due to bankruptcy at any point during the tax year on the marketplace, and if granted, the exemption will be for the remainder of that calendar year. From the marketplace: How long a hardship exemption lasts Hardship exemptions are usually provided for the month before the hardship, the months of the hardship, and the month after the hardship. However, the Marketplace may provide the exemption for additional months after the hardship, including up to a full calendar year. For a hardship exemption based on affordability, the exemption will be granted for the remaining months in the coverage year. For people ineligible for Medicaid only because a state hasn’t expanded Medicaid coverage, the hardship exemption will be granted for the whole calendar year. For people eligible for Indian Health Services, the hardship exemption will be granted on a continuing basis. It may be kept for future years without having to submit another application. This is true as long as there are no changes to your membership in a tribe or eligibility for services from an Indian health care provider. Incorrect... The hardship exemption requirement are clear. What is not clear is when the 6 months starts. If any of the following circumstances apply to you, you may qualify for a “hardship” exemption from the penalty: You were homeless You were evicted in the past 6 months or were facing eviction or foreclosure You received a shut-off notice from a utility company You recently experienced domestic violence You recently experienced the death of a close family member You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property You filed for bankruptcy in the last 6 months You had medical expenses you couldn’t pay in the last 24 months that resulted in substantial debt You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member You expect to claim a child as a tax dependent who’s been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child. In this case, you don't have the pay the penalty for the child. As a result of an eligibility appeals decision, you’re eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren’t enrolled in a QHP through the Marketplace You were determined ineligible for Medicaid because your state didn’t expand eligibility for Medicaid under the Affordable Care Act Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable You experienced another hardship in obtaining health insurance https://www.healthcare.gov/fees-exemptions/hardship-exemptions/ Edited February 4, 2015 by Jack from Ohio Quote Link to comment Share on other sites More sharing options...
JohnH Posted February 4, 2015 Report Share Posted February 4, 2015 (edited) I'll bet #14 will sail through without any questions. That's a catch-all big enough to drive a truck through. Edited February 4, 2015 by JohnH 3 Quote Link to comment Share on other sites More sharing options...
RitaB Posted February 4, 2015 Report Share Posted February 4, 2015 This is going to be just like EIC. When people figure out how to cheat, they will cheat. This is a hardship for ME. What do I get? A big ole plate of nuttin, honey. 1 Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted February 4, 2015 Report Share Posted February 4, 2015 Great question Jack, and from the answers so far, I don't think any of us know the right answer. Please let us know if you come across some official guidance. I would say call the service, but they ain't answering the phones. Perhaps a call to Heathcare.gov support personnel? They are working theopen enrollment right now and they are the ones who are where the request needs to go. It is thin, but better than what you have. Tom Newark, CA Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 4, 2015 Author Report Share Posted February 4, 2015 Great question Jack, and from the answers so far, I don't think any of us know the right answer. Please let us know if you come across some official guidance. I would say call the service, but they ain't answering the phones. Perhaps a call to Heathcare.gov support personnel? They are working theopen enrollment right now and they are the ones who are where the request needs to go. It is thin, but better than what you have. Tom Newark, CA Thank you Tom for the first sensible answer. If I had found guidance, I would not have posted the question. Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted February 5, 2015 Report Share Posted February 5, 2015 (edited) Processing the Individual Shared Responsibility Payment (SRP) in Bankruptcy Cases---->>>>>>> http://www.irs.gov/pub/foia/ig/spder/SBSE-05-1214-0083%5B1%5D.pdf Edited February 5, 2015 by ILLMAS Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 5, 2015 Author Report Share Posted February 5, 2015 Processing the Individual Shared Responsibility Payment (SRP) in Bankruptcy Cases---->>>>>>> http://www.irs.gov/pub/foia/ig/spder/SBSE-05-1214-0083%5B1%5D.pdf That document concerns how the IRS treats a person filing bankruptcy AFTER being assessed Shared Responsibility Payments in prior years. Nothing to do with claiming the hardship exemption. Quote Link to comment Share on other sites More sharing options...
jklcpa Posted April 23, 2015 Report Share Posted April 23, 2015 One of the hardship exemptions allowed is "Filing bankruptcy within the last 6 months." When applying for the exemption certificate # on the marketplace, the client must send "Official bankruptcy filing documents" to support their request. Questions: 1. Does the 6 months refer to the last 6 months of 2014, or 6 months from the date the client is filing? 2. Does the reference to "Official bankruptcy filing documents" refer to the initial filing date of the bankruptcy, or would any of the follow-up documents such as the letter stating that all parts of the bankruptcy have been approved be acceptable. I know there can be a considerable lag between filing and final approval. I have searched and cannot find any guidance about these two items. Anyone else? Incorrect... The hardship exemption requirement are clear. What is not clear is when the 6 months starts. If any of the following circumstances apply to you, you may qualify for a “hardship” exemption from the penalty: You were homeless You were evicted in the past 6 months or were facing eviction or foreclosure You received a shut-off notice from a utility company You recently experienced domestic violence You recently experienced the death of a close family member You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property You filed for bankruptcy in the last 6 months You had medical expenses you couldn’t pay in the last 24 months that resulted in substantial debt You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member You expect to claim a child as a tax dependent who’s been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child. In this case, you don't have the pay the penalty for the child. As a result of an eligibility appeals decision, you’re eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren’t enrolled in a QHP through the Marketplace You were determined ineligible for Medicaid because your state didn’t expand eligibility for Medicaid under the Affordable Care Act Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable You experienced another hardship in obtaining health insurance https://www.healthcare.gov/fees-exemptions/hardship-exemptions/ In case anyone searches for "bankruptcy" in future as it relates to the hardship exemptions, in answer to the original post and #7 in the second quote above, from this page on the Marketplace, the 4th bullet down in the first section says this: "To figure out if the bankruptcy happened within the past 6 months, count back from the day you’ll sign your hardship exemption application." Quote Link to comment Share on other sites More sharing options...
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