Form 8965: Exemption from Obamacare Shared Responsibilty tax

MGeorge · Post by **MGeorge** » Tue Feb 10, 2015 2:12 pm

This really feels like deja vu but here it is again: the first time I hear about a new IRS form I'm required to file.

Has anyone figured out the new form 8965. It looks like any US citizen living in Canada would need to fill this out. Here is my question.
I'm a USC in Canada, both my children and wife are non-resident aliens. Do I have to include their names on this form??? Or do I just list myself and claim code "C"?

nelsona · Post by **nelsona** » Tue Feb 10, 2015 3:08 pm

The instruction talk about "tax household" and provide a definition.
I would include them if you are claiming them as dependents/exemptions on your return.
Let us know what you conclude.

CdnAmerican · Post by **CdnAmerican** » Wed Feb 11, 2015 8:36 am

Just a very quick thought .. maybe I'm underthinking it, but since USC's in Canada (typically) have health care in Canada, wouldn't that exempt us from this form?

MGeorge · Post by **MGeorge** » Wed Feb 11, 2015 9:52 am

That was my initial understanding, but after looking at form 8965, there is a built in exemption for anyone living outside the US. I certainly agree that Canada's healthcare system should qualify, and it probably wouldn't be hard to justify this position.
I just used TaxACT last night, and it was really easy to claim the exemption, and since I don't list my kids as dependents, taxACT didn't force me to list them (obviously I guess, taxACT doesn't know they exist) - this is in line with what nelsona was suggesting.
I think the safest thing is to claim code "C" on form 8965 for oneself - to save one the potential hassle of having to prove Canada's coverage is sufficient.

Regarding NRA children - I believe the form 8965's instructions were written with the assumption that everyone in the household is covered by the ACA mandate. While I could claim the code C exemption for my kids, I don't think I need to because the ACA doesn't apply to them. The form's instructions would lead one to believe otherwise though through use of the term "tax household".

My approach will be not to list the kids on form 8965. If I claim them as exemptions/dependents one day, then I will include them on 8965 just to avoid hassles.

nelsona · Post by **nelsona** » Wed Feb 11, 2015 10:25 am

If they "don't exist" on your return, then you don't need to include them on 8965. Agreed.

birder · Post by **birder** » Fri May 08, 2015 3:28 pm

For those using TaxAct.com, to access this form go to the "Federal Q&A" tab.
In the right column, find "Health insurance" and click to expand subtopics.
Click "Individual coverage exemptions" (or "household coverage exemptions")
Beside "New Copy of Federal Form 8965 Part I" click the plus icon to add this form.
Choose your name in the taxpayer name drop-down
Under the exemption type, choose "C-Citizens living abroad ..."
Below, check the box "entire year" (or specific months, as applicable)
This will fill out your info under Part III. You can review the PDF of the form (once you have paid for this year's return). Mine came out looking just fine.
This form is all you need to send the IRS AFAIK - don't worry about describing Canada's medicare system 8-)

birder · Post by **birder** » Fri May 08, 2015 3:29 pm

when I tried to add this 8695 exemption form, at first I didn't catch that I needed to ask for a "part III" exemption. Don't get lost looking under part II, which is for other stuff.

birder · Post by **birder** » Fri May 08, 2015 3:31 pm

Okay, so to be really exact, my recipe above was for the way I got confused on the first pass.
*Don't* click on "New Copy of Federal Form 8965 Part I"
Only click below that on "New Copy of Federal Form 8965 Part III"
Then you get the right questions for non-residents.