My parents are Green Card holders and lived outside the US the entire 2016. Do they have to pay penalty for not having health insurance?

[JaimeG · Accepted solution]

Anyone on your taxes who is a U.S. citizen or resident who spent at least 330 full days outside the U.S. within a 12-month period that includes all or part of 2016 may qualify to get the tax penalty for going without health insurance in 2016 waived.

While you are entering the information in the Health Insurance Section you must follow these steps to indicate that your parents lived abroad for more than 330 days. 

1. Log into TurboTax and access your current Tax Return 
2. From the Welcome Screen find and click on the Federal Taxes Tab 
3. A second set of tabs will appear, from this section, find and click on the Health Insurance tab
4. The first page should ask you Did you have Health Insurance Coverage in 2016? You will select, the option; I'll pick who had it and which months click Continue
5. The next page will Ask you to select which months each individual had coverage. Select the months appropriately and click on Continue 
6. The next page will ask you to provide a reason for your wife not having Health Insurance. You will scroll down to the section that states, Wasn't required to get insurance and select the option Spent 330 days or more outside U.S. or Choose that they Lived in a Foreign Country or U.S. Territory (Please view the screenshots below)

You are done selecting the correct options to exempt your parents from Health Insurance while living abroad.