Health Care

Did You File a Tax Extension? You May Qualify for an Affordable Care Act Exemption When You File Your Taxes

Written by Magaly Olivero
Published May 20, 2015 - [Updated Jul 23, 2019]
2 min read

If you paid the non-coverage tax penalty when requesting an extension to file your 2014 income taxes, you may be eligible for a tax refund if you later discover that you qualify for an exemption from the federal mandate that most Americans carry health insurance.

The Internal Revenue Service automatically grants taxpayers a six-month extension to prepare their tax returns as long they complete the proper extension form by April 15.

But an extension gives you more time to file – not more time to pay. Taxpayers filing for an extension must make an estimated payment to the IRS, including the tax penalty for any months they were uninsured in 2014 as required by the health law. However, taxpayers who owe money on their 2014 taxes due to an excess advanced premium tax credit, could receive penalty relief if they can’t pay the balance owed.

Since an extension allows you more time to prepare your tax return if you missed the tax deadline, you also now have more time to determine if you were eligible for a non-coverage waiver on your 2014 taxes. The federal government has identified more than 30 exemptions, including hardship cases. The IRS has a free online tool to determine if you’re eligible for an exemption from the tax penalty.

Some exemptions – such as only having access to health insurance plans that exceed 8 percent of household income – can be claimed directly on your tax return. But other exemptions, including hardship cases, require that you apply through a state or federal Health Insurance Marketplace to receive an exemption certificate number.

If you find you’re eligible for an exemption from the tax penalty for not having health insurance and paid the non-coverage penalty when you filed for an extension, the IRS may issue a tax refund or subtract the sum from the total amount of taxes you owe the government.

Still have questions about the Affordable Care Act and your taxes? As with all tax laws, TurboTax has you covered. You can get your questions answered at TurboTax Health.

Magaly Olivero is an award-winning writer and has written for many national and regional media outlets, as well as corporate and nonprofit clients in the healthcare, tax and education industries. Her publishing credits include U.S. News and World Report, Newsweek, The New York Times, Working Woman, Better Homes and Gardens and the Connecticut Health Investigative Team. Magaly is a recipient of a National Journalism Fellowship from the University of California Annenberg School of Communication and a Health Coverage Fellowship from the Blue Cross Blue Shield of Massachusetts Foundation.