The Affordable Care Act will remind us all why the government seldom ever fixes a problem without an opposite and equal negative reaction. Heres an example of what some people will have to deal with when doing their tax returns this year. BTW, can anyone even understand what the following directive is saying? Generally, the HHS regulation sets up several penalty exemptions for not having health insurance. Some people will be applying for exemptions through the Marketplace while others are claimed on the tax return. The religious objection exemption and 14 categories of the general hardship exemptions must be claimed through the Marketplace. Only five specific hardship exemptions are claimed on the tax return. Its important to know that a taxpayer can claim an exemption within three years of the hardship—this syncs up with the time frame for filing an amended return. However, the actual exemption is only good for the month before the hardship occurs, the month after and the duration of the hardship. When you file a Form 8965 with a missing exemption certificate number (ECN), the return will be rejected. However, if your client has applied for an ECN or has a pending ECN, they will still be able to file. Details on how to address that on Form 8965 will be included in upcoming finalized instructions for the form. We suggest you begin communicating this information to your clients now. Remember that §7216 Disclosure Rules prohibit you from using your clients tax information to determine whether or not you think they need to complete the hardship application. Therefore, we suggest you communicate this hardship exemption application to all of your clients.
Posted on: Thu, 20 Nov 2014 22:29:07 +0000
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