Will I be penalized under the ACA if my 26 year old son lost his insurance coverage last September and he qualifies as a dependent? He has an exemption.

[dubis003]

He turned 26 last September and fell off of my insurance on Sept. 29th.

He filed on Healthcare.GOV and received an exemption

He qualifies as dependent for me for 2016 as he didn't work.

Will I be penalized based upon my income since he is a dependent?

Can I choose to NOT count him as a dependent if penalties would apply?

[DanielV01 · Accepted solution]

No, he will not be penalized.  However, you are going to want his exemption certificate to file it for the last 3 months of the year that the exemption applies.  Since you had him covered with insurance until September, you select those months in TurboTax as months he had insurance.  Then you will select October, November, and December as months he did not have coverage but did have an exemption.  TurboTax will ask you for the information from his certificate, which you will input on your tax return since he is your dependent.

(You could choose not to claim him if penalties would be greater than the benefit, but in this case, you shouldn't be penalized).