Solved: Is ACA penalty payable?
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New Member

Is ACA penalty payable?

My spouse, I and child (10 year old) entered US at end of Apr-17. I was covered through employer insurance for complete 2017 but spouse and kid were not covered for whole of 2017. Income is 89000/- USD. 

1. Are we liable to pay penalty under ACA when no exemptions (other than not being in US) are applicable?

2. If we are NOT liable to pay penalty, do we still need to fill Form 8965?

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Level 3

Is ACA penalty payable?

You will not be subject to the penalty because they were out of the US for 330 days prior to entering the US, therefore, they were not required to have insurance.

The tax penalty for not having health insurance in 2017 can be waived if the individual was a U.S. citizen or resident but lived in a foreign country or U.S. territory for at least 330 days within a 12-month period that includes all or part of 2017.


[Edited 3/11/2018 7:33PM EST]

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11 Replies
Level 3

Is ACA penalty payable?

You will not be subject to the penalty because they were out of the US for 330 days prior to entering the US, therefore, they were not required to have insurance.

The tax penalty for not having health insurance in 2017 can be waived if the individual was a U.S. citizen or resident but lived in a foreign country or U.S. territory for at least 330 days within a 12-month period that includes all or part of 2017.


[Edited 3/11/2018 7:33PM EST]

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New Member

Is ACA penalty payable?

Thank you for reply. Confusion is that IRS ACA penalty calculator is showing 0 penalty if I enter Jan-Mar as months for which we were out of USA. Why is penalty calculator not showing any penalty?

Also arrival date in US is 4/29/2017. Will April be applicable for penalty completely?
Level 3

Is ACA penalty payable?

April would not count for the penalty.  If you are exempt for part of a month you are exempt for the entire month.
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Level 3

Is ACA penalty payable?

What other information did you enter in the penalty calculator?
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Level 3

Is ACA penalty payable?

Actually, please see edit.  Because they were out of the country for 330 days prior to coming here including time in 2017 they are not subject to the penalty.
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New Member

Is ACA penalty payable?

Key information entered is:

1. Income 89000
2. Filling Married Jointly
3. Total number of family members 3
4. Myself covered and spouse/kid not covered
5. No exemption for months from May till Dec
6. Exemption for all 3 of us from Jan till Apr - Not lawfully present in US
Level 3

Is ACA penalty payable?

It is the 330 day rule that is having you exempt.
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New Member

Is ACA penalty payable?

Thanks so much for detailed answers. Please help with last 2 very important questions:

My tax return generated showed Line 61 as having complete duration as being covered. Since my tax return includes my spouse and kid as well, will this be considered wrong to claim that there was complete coverage? If yes, am I required to state that the complete coverage was not there and file Form 8965 along with Form 1040.
Level 3

Is ACA penalty payable?

On the left-hand side of your screen click on Tax Tools>>>Tools>>>Delete a form and then look to see if a 8965 is in there.
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Level 3

Is ACA penalty payable?

The 8965 needs to be included with your return for your  family.  If there was not full year coverage, the box shouldn't be checked.  <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/i1040gi.pdf">https://www.irs.gov/pub/irs-pdf/i1040gi.pdf</a>  Page 52
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New Member

Is ACA penalty payable?

How is 330 day rule calculated in this context when my wife and kid entered US for first time on 4/29/2017?
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