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Fixed Assets and UltraTax CS 2023 help is now on Help and Support. We're still moving articles, but you can find most content for the 2023 tax year there. Continue using the Help & How-To Center for tax years 2022 and older.

Question

What is unaffordable coverage under the Affordable Care Act?

Answer

There are two types of unaffordable coverage exemptions from the Health Care: Individual Responsibility payment.

The first exemption is for health insurance premiums that are more than eight percent of household income. The calculation to determine if this exemption applies is on the Health Care: Affordability Worksheet. Data entry to complete this worksheet is on Screen Afford. This exemption is determined on an individual basis and requires the taxpayer to look up their exact bronze plan premiums from the Marketplace based on age, county of residence, who will be covered, and whether or not they smoke. The Department of Health and Human Services has provided a premium look-up tool at Health care tax tools to help you fill out Form 8962. The affordability worksheet will determine if the taxpayer qualifies for the unaffordable coverage exemption. There is data entry on Screen Coverage, Detail of individual health care coverage or exemption, to indicate that the exemption applies. 

The second exemption is the household exemption for household income below the filing threshold. This exemption calculates automatically if the entire family is not covered for the full year. If the gross or household income is below the taxpayer’s filing threshold, the Full-year health care coverage or exempt checkbox on Form 1040, Page 1 will be checked and Form 8965 will not print since the exemption applies for the entire year. No further data entry is required and no health care individual responsibility penalty will calculate.

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