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How do I report the new type of hardship exemption on form 8965?

Christopher
Level 1

New Form 8965 hardship exemption here for states which have only one provider: https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/2018-Hardship-Exemption-Guida... a.      The document states that the guidance is “in accordance with 45 CFR section 155.605 (d)(1)(iii).”  2.    The HHS offered “final” guidance here:  https://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/Authority-to-Grant-HS-Exempti...  This document references (at the bottom) the additional exemptions which were outlined in the original document from April 2018. a.     Please see the section where there is more flexibility being offered for tax year 2018, whereby it is not necessary to obtain the certificate. The exchange is probably getting bombarded by requests for certificates; hence, they created this additional flexibility.  It also states that the request can be made “without presenting the documentary evidence or written explanation generally required for hardship exemptions that there is only one provider.  If it is not sufficient, what would be deemed to be sufficient in order to prove that this lack of choice has precluded them from obtaining coverage under a QHP?”

How do we file this new type of exemption in Lacerte for 2018, 2017 and 2016?


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TaxGuyBill
Level 15

It is exemption Code "G" for 2018.  If you are unsure how to do that, hopefully a Lacerte user will come along (I use ProSeries).

https://www.irs.gov/pub/irs-dft/i8965--dft.pdf#page=4


However, that applies to 2018 ONLY.   From your second pdf:  "This change would apply to 2018 only; thus consumers will only be able to claim the hardship exemptions under §155.605(d)(1) on a federal income tax return for tax year 2018."

For prior years, they need to apply for an ECN through the Marketplace, including the "documentary evidence".  I also suspect that in order to get it for 2016, that would need to be done within the next two weeks.

As for your question of "what would be deemed to be sufficient in order to prove that this lack of choice has precluded them from obtaining coverage under a QHP?", the taxpayer would explain why that ONE provider did not work for their situation (for example, showing that their current doctors were not 'in network' of that provider).




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TaxGuyBill
Level 15

It is exemption Code "G" for 2018.  If you are unsure how to do that, hopefully a Lacerte user will come along (I use ProSeries).

https://www.irs.gov/pub/irs-dft/i8965--dft.pdf#page=4


However, that applies to 2018 ONLY.   From your second pdf:  "This change would apply to 2018 only; thus consumers will only be able to claim the hardship exemptions under §155.605(d)(1) on a federal income tax return for tax year 2018."

For prior years, they need to apply for an ECN through the Marketplace, including the "documentary evidence".  I also suspect that in order to get it for 2016, that would need to be done within the next two weeks.

As for your question of "what would be deemed to be sufficient in order to prove that this lack of choice has precluded them from obtaining coverage under a QHP?", the taxpayer would explain why that ONE provider did not work for their situation (for example, showing that their current doctors were not 'in network' of that provider).




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Christopher
Level 1
Thank you.
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abctax55
Level 15

From a Lacertian:

Screen 39.1 > Under Section > Coverage Exemptions for etc... > fourth column.  Use the down arrow to select the correct exception.  In 2017 "G" states that it is "for state that did not expand Medicare".  That drop down menu doesn't appear functional for 2018 just yet.

(I wanna be a member of the pot stirring club too)
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