Jobless between 17th Feb to 27th March. No Health Insurance from 17thFeb to 31stMay.Due to employer's mistake. Can i exempt from NJ state health tax penalty?

[nandecham]

Lost job on 17th Feb 2024. Got new Job on 27th Mar. Due to employer's software issue could not be able to get the health insurance until 31st May instead of 27th Mar. So in total i was without the Health insurance from 17th Feb to 31st May. (i.e. 3 months and 11 days) Can i file the exemption from NJ state penalty for not having health insurance during this period as it was not the mistake of mine? But it was due to job loss and Employer's mistake. If yes then how? Also I have already filed the taxes so should i file the amendment?

[Vanessa A]

Yes, you would qualify for the Short Gap Exemption.  Since you had insurance on May 31, you are counted as having insurance in May.  Since you had insurance through Feb 17th, you are counted as having insurance for February.  The months you were without coverage would be March and April.  This qualifies as a lapse of coverage of less than 3 months. If your insurance did not start until June 1st, then no, this would not apply. 

• In any tax year, you may apply for a Short-Gap exemption if you had a lapse in coverage of less than three months.
• New Jersey considers you covered during a month if you had coverage for even one day during that month. So if you are without insurance for two consecutive months, you must have insurance by the last day of the third month to qualify for a Short-Gap exemption.
• If you have a gap that is three months or longer, you cannot claim this exemption for any month. The Shared Responsibility Payment will be due for every month you were without coverage.
• If you had two or more such gaps in coverage during a year, you can claim this exemption only for the months of the first coverage gap. Example: You didn't have coverage any day in May or any day in November or December. You can claim the exemption only for May.
• If your coverage gap crosses calendar years, the months without coverage of the second tax year aren't counted for the exemption for the first tax year. But the uncovered months from the first year are counted for the exemption for the second tax year. Example: You don't have qualifying coverage in November 2020, December 2020, and January 2021. You're not eligible for the 2021 short gap exemption for January because you didn't have coverage for three consecutive months - from November 2020 through January 2021.

If you qualify, you can claim this exemption for the dependent(s) you claim on your tax return.  NJ Shared Responsibility Requirement

If you did not start insurance until June 1st, you may also qualify for a hardship exemption.

As you walk through your NJ return in TurboTax, you will be given the opportunity to fill out the exemption for to have the penalty waived. 

[nandecham]

Thank you for your response.

My insurance started from 1st of June.

So I was not covered for full 3 months (Mar, Apr, May) and 11 days in Feb.

[nandecham]

Also I have already filled the return. So should I file the amendment or wait for State to come back ?

[DawnC]

Wait until your returns are fully processed before you amend, as the taxing authority may adjust your return and eliminate the need for the amendment.