Federal 1040A Line 38 Instructions

by Cynthia Gaffney ; Updated March 16, 2018

For tax year 2017, you are required by the IRS to tell them about the healthcare coverage you, your spouse (if filing jointly) and any dependents you have maintained for each month of the year. Recent legislation, including the Tax Cuts and Jobs Act, enacted in 2017, has not had any effect on this requirement. You must have carried qualified insurance, qualify for an exemption from coverage or make a payment for individual shared responsibility when filing your tax return. You must either check the box on line Form 1040A, line 38 (or the corresponding box on Form 1040 or 1040 EZ), stating that you've been insured for the entire year, or provide information about your exemption or payments for your individual shared responsibility.

Qualifying Healthcare Coverage

For tax year 2017, each taxpayer must have a qualifying type of health care coverage; spouses and dependents must also have qualifying insurance. Qualifying health care, which the IRS calls minimum essential coverage, must be in place for each month of the tax year. Qualifying types of insurance include Healthcare Marketplace plans, plans from your employer, Medicaid, Medicare and Children's Health Insurance Program.

If you've had coverage for at least one day of a month, that counts for a full month. If you didn't have coverage, you must either have an exemption or make a shared responsibility payment along with your tax return. If you, your spouse and your dependents had qualifying coverage for all of 2017, check the Full Year Coverage box on Form 1040A and leave line 38 blank. You may also leave this line blank if you had a spouse that wasn't covered in the month of their death, but was covered each month of 2017 prior to death. If you adopt a child or dependent, or you give birth during the year, leave the line blank if the dependent had minimum essential coverage for each month of 2017 after the adoption or birth.

Understanding Exemptions

If you, your spouse or dependents did not have minimum essential coverage, you still may be exempt from making an individual shared responsibility payment to the IRS. To be considered exempt, you must have had no affordable health care coverage options because all plans available to you had annual premiums equaling more than 8 percent of your annual household income. If you've had a gap in coverage for less than three months or have any type of hardship that prevented you from getting coverage, the IRS may consider you exempt. If you fit any of these scenarios, fill out Form 8965 – Health Coverage Exemptions, which provides additional details on the exemptions and information on calculating any shared responsibility payments due. If someone else claims you as a dependent on their tax return, leave line 38 blank and don't complete Form 8965.

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Shared Responsibility Payments

If you cannot check the Full Year Coverage box on line 38 and you don't qualify for an exemption, you'll need to report and make shared responsibility payments for you, your spouse (if filing jointly) and dependents for any months without coverage. This payment equals either a flat amount or a certain percentage of your household income, whichever is greater. The payments are capped at the national average cost of the Healthcare Marketplace's bronze-level plan. Use worksheets found on IRS Form 8965 to calculate the payments due. The form helps you figure the annual amount; you'll owe one-twelfth of this amount for each month you did not have coverage or did not qualify for an exemption.

About the Author

Cynthia Gaffney started writing in 2007 and has penned tax and finance articles for several different websites. She brings more than 20 years of experience in corporate finance and business ownership. Gaffney holds a Bachelor of Science in finance and business economics from the University of Southern California.

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