He does not have to pay the penalty IF:
You choose to make an election to file a married filing jointly return and choose for your dual status spouse to be treated as a US resident for the entire year. You both need to declare your worldwide income (he can use foreign tax credit to help offset any double taxation):
If you are a dual-status alien, you can choose to
be treated as a U.S. resident for the entire year
if all of the following apply.
• You were a nonresident alien at the beginning of the year.
• You are a resident alien or U.S. citizen at
the end of the year.
• You are married to a U.S. citizen or resident alien at the end of the year.
• Your spouse joins you in making the election.
Making the choice. You should attach a statement signed by both spouses to your joint return for the year of the choice. The statement
must contain the following information.
• A declaration that you both qualify to make
the choice and that you choose to be treated as U.S. residents for the entire tax
year.
• The name, address, and taxpayer identification number (SSN or ITIN) of each
spouse.
See page 8 of the following IRS Publication for more information.
Publication 519
You will need to print your return and attach the statement and mail the return to the IRS.
For the health insurance exemption:
Foreign nationals who live in the United States for a short enough
period of time that they do not become resident aliens for federal
income tax purposes are exempt from the individual shared responsibility
payment even though they may have to file a U.S. income tax return. The
IRS has more information available on when a foreign national becomes a resident alien for federal income tax purposes. Individuals who are exempt under this rule include:
- Nonresident aliens;
- Dual-status aliens in their first year of U.S. residency;
- Nonresident aliens or dual-status aliens who elect to file a joint return with a U.S. spouse;
- Individuals who file a Form 1040NR or Form 1040NR-EZ (including a
dual-status tax return for their last year of U.S. residency); and
- Individuals who are claimed as a personal exemption on a Form 1040NR or Form 1040NR-EZ.
See Question 8 of the below link:
This healthcare
exemption is not detailed in TurboTax however it is code "c" for the
exemption, the same code as a US citizen or resident alien who was physically
present in a foreign country for at least 330 days in any 12 month period.
Please see the Form 8965 instructions, page 3. https://www.irs.gov/pub/irs-pdf/i8965.pdf
In
TurboTax you will need to check the exemption that you were present in a
foreign country for at least 330 days in order to file using exemption c.
