Could you be among the millions of uninsured Americans who qualify for an exemption from the tax penalty for lacking insurance coverage as required by the Affordable Care Act?
The fee for people who went without health insurance in 2014 is $95 per person or 1 percent of their household’s taxable income (whichever amount is higher) and may be reported on their taxes when they go to file this tax season.
But the federal government has identified more than 30 ways to qualify for an exemption.
Here are the top six reasons people are exempt from the penalty, according to those who have used the IRS free online tool.
Short coverage gap People who were uninsured for less than three consecutive months at one point during the year don’t need to pay the tax.
Unaffordable coverage If the cost of lowest priced coverage exceeds 8 percent of your household income, you may not be required to buy health insurance and face a tax penalty.
Hefty medical bills People who have unpaid medical expenses in the last 24 months that resulted in substantial debt may qualify for a hardship exemption.
Natural disaster People who sustained substantial property damage due to a fire, flood or other “natural or human-caused disaster” also may qualify for a hardship exemption.
Cancelled insurance plan If your insurer cancelled your plan because it did not comply with the health law and you can’t afford a marketplace plan you may be able to qualify for an exemption.
Transition relief Folks who were eligible but decided not to enroll in an employer-sponsored plan that began in the middle of 2013 are exempt from the penalty.
For a full list of exemptions, check out Healthcare.gov. If you think you might qualify for an exemption, make sure to apply now so you don’t delay filing your tax return.
TurboTax has you covered. If you have more questions about exemptions or need to apply for an exemption you can get help at TurboTax Health.