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California Individual Shared Responsibility penalty in ProSeries

by Intuit Updated 1 year ago

Starting in 2020, Californians who don't have health insurance and who don't qualify for an exemption are subject to pay an Individual Shared Responsibility penalty, or ISR. Form FTB 3853 will be used to claim an exemption or calculate the penalty amount.

You can use this calculator to estimate your clients' penalty amounts.

Where do I enter health coverage in ProSeries?

Much like the federal Affordable Care Act in 2018 and prior, the Healthcare Entry Sheet is a convenient starting point for health coverage, exemptions, ISR penalty, and premium assistance. To complete the Healthcare Entry Sheet:

  1. Open the California return.
  2. Select the Healthcare Wks from the Forms in Use section of the Forms Bar.
  3. Check the appropriate box to answer whether Everyone on the tax return was covered by health insurance all year.

If your answer is Yes, and your client didn't receive any coverage through the state marketplace (Form 3895), the worksheet is complete. No other entries are needed. If your answer is No/Partial, or if your client had marketplace coverage, continue with the steps below that apply to your client's situation.

If your client had state marketplace coverage (Form 3895):

  1. If anyone on the tax return had coverage through the state marketplace during the year, you must complete Form 3895. Click the QuickZoom to Form 3895 button on the Healthcare Entry Sheet.
  2. Enter the marketplace policy number reported on Form 3895, then select Create.
  3. Enter the information from Form 3895 in the fields provided.
  4. In Part II Coverage Information, make sure to complete all three columns for each month. If the amounts were the same all year, just complete the first line, and select the box next to January to have ProSeries autocomplete the other months.

To enter all other types of health coverage:

If your client received a 1095-B or 1095-C, those forms are not required to be filed with the tax return. However, you can use the information to complete the table on the Healthcare Entry Sheet indicating which months each individual had coverage.

  1. Enter the covered individual's name, SSN, and date of birth.
  2. Check the box(es) for each month they had coverage, or check Covered all 12 months, if applicable.
  3. Repeat steps 1 and 2 for each individual on the return who had coverage for all or part of the year.
    • To delete an individual, right-click on their name, and select Delete line in table.

To claim a Health Coverage Exemption (Form 3853):

Entries for all healthcare exemptions will be made on Form 3853. To quickly access the form, click the QuickZoom button to Form 3853 located on the Healthcare Entry Sheet.

For more information about the state healthcare mandate, see the FTB Newsroom.

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