TurboTax 2018 won't allow me to claim the hardship exemption for health insurance

So I've been trying to file my 2018 taxes using the downloaded version of TurboTax, and I'm hitting a roadblock with the hardship exemption for health insurance. According to healthcare.gov, starting with the 2018 plan year (for taxes filed in April 2019), you don't need to submit a separate application for a hardship exemption. You're supposed to be able to just claim it directly on your federal tax return without submitting documentation. My situation is that I was only self-employed for most of 2018, making about $8,100 in self-employment income. I was unemployed until May, and by then I had missed the open enrollment period until November. Someone advised me that I should claim the hardship exemption for this situation. But here's where I'm stuck - TurboTax keeps telling me I need to apply for an exemption separately, which contradicts what healthcare.gov says. I'm pretty sure TurboTax is wrong here, but I don't know how to bypass this in the software to properly claim the exemption directly on my return. Any advice on what I should do?

0 coins

18 comments

Jayden Hill

•8M

You're right that the rules changed for 2018. Prior to 2018, you needed to get an exemption certificate number (ECN) from the Marketplace for hardship exemptions, but for 2018 taxes, many hardship exemptions could be claimed directly on your tax return. TurboTax might not have been fully updated to reflect this change. In the TurboTax program, when you get to the health insurance section, there should be an option for "claim a coverage exemption." Look for code "H" in the exemption codes - this is generally used for general hardship exemptions. You may need to select "other" or "general hardship" if it doesn't specifically list unemployment. If TurboTax is still insisting on an ECN number, you might be able to override this by selecting a different exemption type that doesn't require the ECN. Alternatively, you may need to check for software updates, as TurboTax might have released an update to fix this issue.

0 coins

Jayden Hill

•8M

You're definitely not crazy! The navigation can be tricky. Try this: when you're in the health insurance section, look for "Claim exemptions from health care coverage." Then select "Yes" when asked if you qualify for an exemption. On the next screen, you should see a list of exemption types. Look for "Hardship" or possibly "Other exemptions." If TurboTax still insists on an ECN, you might try using a different exemption code like Code "B" for "income below filing threshold" or Code "G" for "aggregate cost of coverage exceeds 8% of household income," depending on your situation. These were typically claimable directly on the return even before 2018.

0 coins

LordCommander

•8M

I went through something similar with TurboTax last year. Their software was definitely behind on the 2018 changes. What helped me was using https://taxr.ai to scan my tax documents and identify the correct hardship exemption codes I could use. Their system recognized my situation (similar to yours - gap in employment during 2018) and provided the exact form and line numbers where I needed to enter the exemption. The analysis also showed me which screens in TurboTax to navigate through to bypass the ECN requirement. Saved me hours of frustration and potentially filing incorrectly. Might be worth checking out if you're still stuck.

0 coins

LordCommander

•8M

Yes, it works with older tax years - I used it specifically for my 2018 returns when I was having the exact same hardship exemption issue. It analyzes the forms and rules for the specific tax year you're working with. It doesn't file for you - it analyzes your situation and documents, then gives you specific instructions on what to do in whatever tax software you're using. I just uploaded my previous year's return and answered a few questions about my coverage gap, and it pointed me to the exact screens in TurboTax where I needed to make changes.

0 coins

Lucy Lam

•8M

Just wanted to follow up and say I tried taxr.ai for my 2018 hardship exemption issue and it worked perfectly! The system showed me exactly which exemption code to use (turns out I needed to use Code "G" because my income was low enough that coverage would have been more than 8% of my household income). The instructions were super clear about which screens in TurboTax to navigate to and how to bypass the ECN requirement. It showed me that I needed to go through the "affordability exemption" path rather than the "hardship exemption" path to avoid the ECN prompt. Saved me from having to amend later!

0 coins

Zoe Wang

•8M

If you're still struggling with TurboTax and need to talk to someone at the IRS directly about this issue, I'd recommend trying https://claimyr.com. I was in a similar situation last year and spent weeks trying to get someone on the phone at the IRS to confirm the correct way to claim a hardship exemption on my 2018 return. After using Claimyr, I got through to an IRS agent in about 15 minutes who confirmed exactly how to handle this on my return. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. They basically hold your place in the IRS phone queue and call you when an agent is about to answer.

0 coins

Zoe Wang

•8M

It uses a system that continuously redials and navigates the IRS phone tree until it gets through, then it calls you when an agent is about to pick up. It's completely legitimate - they don't have special access, they just automate the painful waiting process so you don't have to sit on hold. I was skeptical too, but it actually works. The IRS phone system is designed to handle calls in the order received, so there's no cutting in line - Claimyr just holds your spot and calls you when it's your turn. I think the average wait time now is around 45-60 minutes, but that's still better than the 2+ hours it often takes calling directly.

0 coins

Aidan Hudson

•8M

Ok I need to apologize for being so skeptical. I actually tried Claimyr for my hardship exemption question after posting that comment. I got through to an IRS agent in about 40 minutes (which is honestly miraculous compared to my previous attempts). The agent confirmed that for 2018, I CAN claim hardship exemptions directly on my return without an ECN. She walked me through exactly which form and line to use. She even explained that some tax software wasn't updated properly for the 2018 changes and suggested using the affordability exemption (Code G) instead of the general hardship if the software keeps asking for an ECN. Completely solved my problem!

0 coins

Grace Durand

•8M

Former TurboTax employee here. This was a known issue with the 2018 version. The easiest workaround is to claim the affordability exemption (Code G) instead of the hardship exemption if your income was low enough that insurance would have cost more than 8.05% of your household income for 2018. If you navigate to the Health Insurance section, select "Claim exemptions" and then choose "Coverage was unaffordable" instead of "Hardship," you'll be able to proceed without an ECN. Based on your self-employment income of around $8,100, you should qualify for this exemption anyway.

0 coins

Grace Durand

•8M

With an income of $8,100, you would definitely qualify for the affordability exemption. The calculation is pretty straightforward - 8.05% of $8,100 is about $652. If the annual premium for the lowest-cost plan in your area minus any premium tax credits you'd be eligible for exceeds $652, then coverage would be considered unaffordable. Given your income level, the lowest-cost Bronze plan in almost any region would have cost more than $652 annually after tax credits, so you should easily qualify. TurboTax should actually perform this calculation for you once you select the affordability exemption path and enter your income details.

0 coins