We did not have healthcare insurance for 2 months while we waited for Medicare to kick in do we still owe a penalty for 2 months?

[phillipshazel]

Turbo Tax is saying we had to pay a penalty for not being insured for 2 months, I thought it said you have a 2 month grace period?

[ShawnaD · Accepted solution]

No, you are only penalized for the full months in which you don't have health insurance.

If you have less than 2 months without consecutive coverage then you won't be penalized for not having health insurance. Please see this link for more information: https://www.healthcare.gov/exemptions-tool/#/results/2016/details/short-gap

You will want to revisit the Health Insurance section in TurboTax and review the answers you have entered for the questions to make sure you are not penalized.

Select that you will enter the months in which you both had health insurance, then select the months that you had insurance on the next screen.

You should then see "Did you have a situation that waives the tax penalty for being uninsured?", if none of those options apply to you leave them blank and click continue.

On the next screen, "We need to check if you had health coverage at the end of 2015", select the months in which you were covered and click continue. If you were covered for those last two months of the year the penalty should be waived.