Will the ObamaCare Penalty Affect My 2014 Tax Return? Part V

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How does an individual file for an exemption?

There are two ways to request an exemption. 

The first way is through the state Health Insurance Exchange.  These exemption requests will be reviewed by the residing State exchanges.  If the exemption is approved, the state exchange will issue an exemption letter in addition to notifying the IRS.  State exchange exemptions should be used by those seeking an exemption for religious or hardship reasons.

The IRS will approve exemptions for those who cannot afford coverage, have coverage gaps, non-citizens, and taxpayers with a low income household.  These exemptions should be claimed by taxpayers on their annual income tax returns using Form 8965.

Exemptions for taxpayers who are Native American tribe members, part of health care sharing ministries, or in prison may apply for an exemption with either the IRS or their state exchanges.