What are tax exemptions

what are tax exemptions

What are Marketplace Hardship Exemptions, and How to Qualify?

Ed note: If you didn’t have health insurance in 2014, you may be avoiding your tax return in fear of having to pay a penalty. There’s good news, though. You may qualify for an exemption – which means you don’t have to pay the fee. Here’s a closer look at some exemptions that are a little more complicated.

Whether or not you took advantage of buying health care through the Federal Marketplace, you’ll probably have to deal with some parts of the Affordable Care Act (ACA) when filing your taxes. Figuring out how the law affects your taxes can seem overwhelming, but luckily H&R Block has an ACA Tax Impact Calculator and tax professionals who are ACA Specialists to guide you through each step.

If you didn’t have health coverage during all or part of 2014, you’ll have to either pay the

ACA tax penalty (also known as the “shared responsibility payment” or “fee”), or claim an “exemption,” which waives the fee you otherwise would have paid because you did not have health insurance coverage. There are a variety of exemptions, many of which can be claimed on your federal tax return. Some c ommon exemptions from buying health coverage include having too little income, religious objections, incarceration or being out of the country.

There are also “hardship” exemptions. Hardship exemptions are tough life situations that have prevented you from getting health insurance. For some of these hardships, you’ll have to include proof of the situation in your application, such as a notice from a power company that your utilities were shut off. For others, like homelessness, you won’t have to provide documentation.

The list below details what paperwork you’ll need when applying for a hardship exemption. Your tax professional will guide you through the process.

Source: blogs.hrblock.com

Category: Taxes

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