Unsure if I should put yes or no to health insurance coverage on tax form

I'm really stressed out about my taxes this year and I'm hung up on this health insurance question. I had coverage through my job for January to March, then I was unemployed for a few months and didn't have insurance. Found a new job in August and got coverage again from September through December. The tax form is asking if I had health insurance coverage for the entire year and I'm not sure whether to mark yes or no. Since I had coverage for 7 months total but there was that 5-month gap in the middle, do I say yes or no? I don't want to accidentally commit tax fraud but I also don't want to pay a penalty if I don't have to. My friend told me the individual mandate penalty isn't enforced anymore but I'm still worried about answering correctly. Has anyone dealt with this before? Will this affect my refund? The software I'm using doesn't really explain it clearly.

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18 comments

Laila Fury

•8M

This is actually pretty straightforward. You should answer "no" to having full-year coverage since you had that gap. The form is asking if you had qualifying health coverage for every month of the tax year. The good news is your friend is right - the federal penalty for not having health insurance (the "individual mandate") was reduced to $0 starting in 2019, so you won't face a federal penalty for those uncovered months. However, be aware that some states (like California, Massachusetts, New Jersey, Rhode Island, and DC) have their own individual mandates with state-level penalties. If you live in one of those states, you might still face a state penalty for the months you weren't covered. When you complete your tax return, you'll need to fill out Form 8965 to report the months you did and didn't have coverage. Just be honest about the gap in coverage - it's not fraud to accurately report your situation!

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Laila Fury

•8M

For partial month coverage, the IRS generally looks at whether you had coverage for at least one day in that month. However, most employer plans start on the 1st of the month following employment, so in your case, August would count as not covered if your insurance truly didn't start until September 1st. State penalties do vary significantly. For example, Massachusetts can charge up to $1,908 per year for an individual (for 2025), while California's penalty is based on a flat fee or percentage of income, whichever is higher. New Jersey and DC have similar structures based on the old federal penalty calculations. If you're in one of these states, the tax software should walk you through the state-specific requirements.

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Simon White

•8M

I went through something really similar last year with health insurance gaps and found this amazing tool called taxr.ai (https://taxr.ai) that really helped me figure it out. I was so confused about how to report my coverage periods and whether I'd face penalties. The tool analyzed my situation and showed me exactly how to fill out the health insurance section based on my specific coverage dates. It even explained which forms I needed and how to report my coverage gaps correctly. I found out I qualified for an exemption I didn't know about! What I liked most was how it broke down the state vs federal requirements since I had moved mid-year. No more guessing about whether I was doing it right.

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Simon White

•8M

You actually just answer questions about your situation and upload any relevant insurance forms or documents. It has this really smart system that can read your 1095-A, B, or C forms and extract the coverage dates automatically. Then it tells you exactly what to enter in your tax software. Super helpful if you switched plans or had gaps. I'm not trying to sell anything - I was just confused like the original poster and found this helpful. The IRS instructions might seem clear if you have a simple situation, but when you've changed jobs, moved states, or had coverage gaps, it gets really complicated. The tool helped me understand which exemptions applied to my specific situation and how to document them properly.

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Nasira Ibanez

•8M

Ok I have to admit I was wrong about taxr.ai. After my skeptical comment I decided to try it anyway because I was also confused about my health insurance situation (had Marketplace coverage then switched to employer mid-year). The tool actually saved me a bunch of money by identifying that I qualified for an affordability exemption for the two months I wasn't covered. It found some obscure rule that my tax software completely missed. It even generated the right forms for me to include with my return. For anyone with complicated health insurance situations during the year, it's definitely worth checking out. Sorry for being so dismissive before - I was frustrated after spending hours on my taxes.

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Khalil Urso

•8M

Anyone who's tried calling the IRS to get answers about health insurance reporting knows it's basically impossible to get through. After waiting on hold for 3+ hours trying to ask about my coverage gap situation, I found Claimyr (https://claimyr.com) and it was a game-changer. They have this system that gets you through to an actual IRS agent way faster. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. I was skeptical but desperate since my tax filing deadline was approaching fast. I got through to an IRS representative in about 20 minutes instead of the 4+ hours I was being quoted, and they clarified exactly how to handle my health insurance reporting situation with gaps in coverage. Saved me tons of stress wondering if I was doing it right.

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Khalil Urso

•8M

It's actually connecting you to the real IRS. From what I understand, their system navigates the IRS phone tree and holds your place in line, then calls you when an actual IRS agent is about to come on the line. You're talking to legitimate IRS employees, not random "tax experts." The reason it works is because they have technology that constantly redials and navigates the system for you instead of you having to sit on hold yourself. It's like having someone else wait in line for you. It's completely legitimate - you're still speaking with official IRS representatives, just without the multi-hour wait.

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Brian Downey

•8M

I need to apologize for my cynical comment about Claimyr earlier. My tax situation got complicated when I realized I might qualify for a healthcare exemption due to a coverage gap when changing jobs. After struggling to get through to the IRS for days, I reluctantly tried Claimyr as a last resort. I got connected to an actual IRS agent in about 25 minutes. The agent was able to confirm I qualified for a hardship exemption and walked me through exactly how to document it on my return. Saved me not only hours of hold time but potentially hundreds in state penalties since I'm in Massachusetts. Sometimes being proven wrong is a good thing.

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Jacinda Yu

•8M

As of 2025, the states with their own health insurance mandates and penalties are California, Massachusetts, New Jersey, Rhode Island, Vermont, and the District of Columbia (DC). Since you moved from Texas (no state mandate) to Rhode Island (has state mandate), you'll need to follow Rhode Island's rules for the portion of the year you lived there. For Rhode Island, you'll need to prorate the penalty based on the months you were a resident without coverage. Their system is similar to the old federal penalty - either a percentage of income or a flat fee per person, whichever is higher. The tax software should help calculate this if you indicate your residency change properly. Make sure you enter the exact date you established residency in Rhode Island!

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