January 4, 2019 1:14 am

New Hardship Exemptions for Individual Mandate

While the Tax Cuts and Jobs Act repealed the individual mandate penalty as of January 1, 2019, the requirement for individuals and their dependents to have minimum essential health coverage unless exempt or pay a penalty still applies for 2018 returns. However, the IRS has stated that certain hardship exemptions can be claimed for 2018 without having to obtain a hardship exemption certificate from the health insurance Marketplace (Notice 2019-5).

A person is eligible for a hardship exemption for at least the month before, the month(s) during, and the month after the specific event or circumstance that creates the hardship if:

  1. He or she experienced financial or domestic circumstances, including an unexpected natural or human-caused event, such that he or she had a significant, unexpected increase in essential expenses that prevented him or her from obtaining coverage under a qualified health plan;
  2. The expense of purchasing a qualified health plan would have caused him or her to experience serious deprivation of food, shelter, clothing, or other necessities; or
  3. He or she has experienced other circumstances that prevented him or her from obtaining coverage under a qualified health plan.
Tax Glossary

Head of household

Generally, an unmarried person who maintains a household for dependents and is allowed to compute his or her tax based on head of household rates, which are more favorable than single person rates.

More terms