ACA and Income Threshold and Box CHoices

[Chowdahead]

I've had several clients who do not need coverage because they do not meet the minimum filing threshold.  On form 8965 there are two boxes on the input screen that say something to the effect:

• Check here if filer is claiming an exemption solely because they don't meet the income threshold
• Check here if filer is claiming a hardship exemption due to not meeting the income threshold.

The first option sounds right, but the second sounds confusing,  Does it refer to the Hardships that can only be granted by the Health Exchange?  Otherwise, I would never check the second box, correct?

When I check either box, I still get a yellow error line when I check for errors, advising me that I have not checked Full Year Coverage on 1040 Pg. 2 and that I should file an exemption, which I seemingly did by checking the first box above.

Is this a bug or am I skipping something else I need to complete on the 8965?

[Pacun]

It seems that option 1 is checked automatically by the software if they qualify. Option 1 yes is greyed out for me on all returns. It is either check or blank.

For option 2, you have to select what kind of hardship for each member and select what months the hardship was present.

Let's say that I only make 1K every month for 11 months and I have 3 children. Then I hit the Powerball on Dec 15th and I have 100 millions in December.  Since not only am I lucky but I am also smart, the first thing I need to do is to get health insurance for December for me and for all my dependents. So, in this case, option 1 is not available to us because we are reporting 100 millions and 11 thousand dollars on our return. So we go to option 2 and we select that insurance was not affordable to us for those 11 months. If you don't select the months, you will get that yellow message.