Am I Exempt if I am an American Citizen Moving Outside of U.S.A?
I moved to Peru the last year. I came back this month (February) to file my taxes and the divorce.
I have been using the health insurance of my husband but I’m not any more and I didn’t get the ObamaCare plan.
I am going back to Peru next month where I will stay.
How can I be sure that I don’t gonna have to pay the penalty of not having Obama care insurance?
You qualify for an Exemption from the Tax Penalty if you are a U.S. citizen who spent at least 330 full days outside of the U.S. in a 12 month period or are a bona fide resident of a foreign country (or multiple countries) for a full tax year.
The 330 day rule applies to 12 consecutive months. They must be full days, but don't have to be consecutive days. You can claim the exemption for any month the rule would apply to. You won't owe the Shared Responsibility fee for any month that the 330 day rules applies to.
You will file for this exemption with your tax return as per the 8965 exemptions form instructions.
Here is what the instructions say:
Citizens living abroad and certain noncitizens (code “C”). You can claim a coverage exemption for yourself or another member of your tax household to which any of the following apply.
The individual is a U.S. citizen or resident who is physically present in a foreign country (or countries) for at least 330 full days within a 12-month period. You can claim the coverage exemption for any month during your tax year that is included in the 12-month period. For more information, see Physical Presence Test in Pub. 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.
The individual is a U.S. citizen who is a bona fide resident of a foreign country (or countries) for an entire tax year. You can claim
the coverage exemption for the entire year. For more information, see Bona Fide Residence Test in Pub. 54.
The individual is a resident alien who is a citizen or national of a country with which the U.S. has an income tax treaty with an applicable nondiscrimination clause and who is a bona fide resident of a foreign country for an uninterrupted period that includes an entire tax year. You can claim the coverage exemption for the entire year. For more information, see Bona Fide Residence Test in Pub. 54.
The individual is a bona fide resident of a U.S. territory. You can claim the coverage exemption for the entire year.
The individual is not a U.S. citizen, not a U.S. national, and not an individual lawfully present in the U.S. For more information about who is treated as lawfully present for purposes of this coverage exemption, visit healthcare.gov.
You file a Form 1040NR or Form 1040NR-EZ. Do not attach Form 8965 to your tax return.
To claim this coverage exemption, enter code “C” in Part III, column c, and identify the months to which the exemption applies as described under Column d - p—Calendar Months, later.
You can learn more about the Physical Presence test, which relates to more than just the ACA, by clicking on the following link.
NOTE: If you take the 330 day exemption, have foreign coverage that counts as minimum essential coverage, have U.S. qualifying coverage, or have an exemption of another type for each month then you are safe from the fee. This means exacts for any specific person are likely to be complex. Given the complexity, we can't always answer every question. You should treat this information like a jump-off point and seek further information from a tax professional, the 8965 form, or the IRS specifically. See Foreign Insurance Coverage Fast Facts for Assisters from CMS for more details. I don't know of a list of coverages that count as MEC (minimum essential coverage), but generally nations that offer universal coverage or at least the benefits that ObamaCare offers should generally count.
How is the 12 month period calculated? Based on a calendar year or any 12 month period eg June to June the next year and son on? Vague answer. Cannot find a determination anywhere.
We updated the answer. The 12 month period is any 12 month period you choose. You are exempt from any month that 12 month period applies to in the taxable year.
I’m still a little confused. I was out of the country for more than 330 days, but visited the US in April and August of last year. Are these the months that I need to check exemption from or am I exempt for the full year since I was gone over 330 days or am I exempt for the other 10 months that I wasn’t in the country. Thanks.
You can use any 12 month look-back period you choose. If you have more than 330 full days outside of the country then you are exempt. If you spent too many days in the US during any point of that 12 month look-back period, then you can’t include those months in your 12 month look-back period. So you’d have to end your look-back period at the time you come back to the US or start your look-back period after you left again. You can have two look-back periods in the same year, since it’s based on months and not calendar years.
If that means that you aren’t exempt for the full year, then you can look into other exemptions. For instance, if you don’t have to file taxes in the US you are also exempt.
My husband and I have been traveling outside of the USA since January of 2013 and aren’t planning on returing home until fall of 2014. We have travel insurance through World Nomads. Are we exempt from Obama Care? We are on long term leaves of absences from work and the travel insurance is our only insurance at the moment. We have been traveling with travel visas only and have not been back to the USA since leaving last year.
Still a little confused. Since the 12-month period can be any 12-month period, how does that apply to a tax year? I left the US on 5/26/15 and plan to return in June 2016. Therefore, I’ll have to file taxes for 2015, correct? I will not have met the 330 day threshold by the time I have to file taxes, so I don’t think I will qualify. Is that correct?
From what we understand: the 330 day period has to have already happened before you file and it has to include at least one month in the calendar year you are filing for.
5/26/15 – 6/1/16 is over 330. So you can pick 330 consecutive days in that time period this can apply to both 15 and 16 tax filing. Although when filling for 2015 in April you will be just shy of an actual 330. So that does make sense that it would be confusing. Our guess is that you could attest to the fact that you will be out of the country and/or file an extension which will give time for the full 330 to actualize.
This isn’t professional tax advice, just relaying our understanding and giving room for us, or another reader, to come back with verification.
This is particularly confusing for me as well. I moved abroad in August 2015… From January until August I had Healthcare through my job. I’ve moved abroad with the intention of living there permanently, and have Healthcare coverage here. So 330 days haven’t passed, but they certainly will eventually! I will be beyond angry if I’m expected to pay into a system that I will never use.
The 330 day rule can be used in a few different ways. Check out the IRS documentation on this: https://www.irs.gov/Individuals/International-Taxpayers/Foreign-Earned-Income-Exclusion—Physical-Presence-Test
Im moving from Chicago to the Netherlands in march for a dedicated 2 year contract which includes dutch health care. Do i need to pay for 1 month here and then cancel my plan?
The fee and needing to get coverage is all about living in the US for 330 days of the year and paying US taxes. If you’ll be here for one month and then out of country the rest of the year, you can take the 330 day exemption and/or the less than 3 months without coverage exemption. https://obamacarefacts.com/obamacare-exemptions-list/
OK. I went to Africa July 9 for 2 weeks, returned to Texas to gather the last of my belongings, and then returned to Africa on a 2 year teaching contract. I have been in Africa since then. However, the contract was cancelled and I have had to return to Texas unexpectedly. How do I deal with this, as I WAS living abroad, but I don’t think I meet the 330 days???
This is very confusing. I live abroad and returned to America April 24th. I’ll leave again June 12. It does not seem to meet the 330 day rule, but can I use the look back period and how should I use it. Thank for your help.
I am on work visa in USA. Recently my wife moved to USA to live with me in June 2016. I am on employer sponsor health insurance plan however my wife does not have health insurance coverage. We are planning to enroll her for health insurance using Market place during November 2016 open enrollment. Currently Market place is closed and she does not qualify for life events.Do we have to pay penalty for months she was in US in 2016 without health insurance? This is the first time she visited USA. I will be filling joint federal income tax returns for 2016.
Is she can qualify for 330 days exemption as she just moved to USA in June 2016?
I am a US citizen, I have Obama care, I got my insurance while I was residing in California, so I have Blue Shiled of California.
I have moved to Turkey and live between Turkey and Iran.
Should I do anything concerning my insurance? When I am asked to update my information for the policy, do I report that I am living out side of US and if so, how will it effect my insurance policy ?
I appreciate anyone who id knowledgable in this area and is willing to shed some light on this matter for me.
I and my wife are covered under ACA for the year 2016. We intend to out of USA for about four/five months.What will be the conditions that will apply to us on the following.
1. Are we to pay the monthly premium for which we are not in the USA
2. If we are not to pay the premium how do we get reentry into the scheme when we
return to USA which falls out side the enrolment time.
Everyone gets a short-term coverage gap exemption every year and the year is based on the tax year, but it is generally unwise not to have health insurance. In theory everyone can go without coverage from October to the end of December every year if they get in a financial bind without getting penalized. The reason it is unwise to take the three months at other times during the year is enrolling in health insurance outside of open enrollment periods can be difficult. 2017 Open Enrollment ends January 31st, 2017.
Outside of trying to time trips abroad well and trying to enroll outside of the enrollment periods for different types of insurers there are a few options. You may be able to get a marketplace plan that provides limited coverage overseas. If you are under 30 or qualify for a hardship exemption you can also shop catastrophic coverage (also look for plans which cover emergency medical costs abroad). The Premiums are lower and the money you save can be used for any out-of-pocket medical costs while you are abroad immediately. It is tax free if you pair put it into an Health Savings Account (HSA) first.
If you return to the U.S. In April and don’t get a job until June, and you don’t have insurance through December of that year, do you pay a penalty for May-December or can you exclude a month that you had no income?
I am confused somewhat. I am a US citizen and reside outside the US. I have spent less than 330 days outside the US in the past 12 months. Would I then be entitled to Obamacare? If so how do I enroll?
Yeah, if you are a citizen and you pay taxes, you can get ObamaCare (keeping in mind the repeal / replace process has started and thus this is only true for now).
I believe (you’d need to double check) that this is true even if you are exempt (although it would be odd to get a plan 35 days of a year).
The exemption is for those who really aren’t going to be in the country, but pay taxes and are living outside the U.S. for most of the year.
There are also foreign insurance exemptions… So I think if you live somewhere and have foreign insurance then you could be in a strange position where you can’t get subsidies because the foreign coverage counts as MEC (Minimum essential coverage).
Each of the above is something I would want to check specifically. So take it as general advice to point you in the right direction, not gospel.
I moved to UK in August 2016 and will be there for 1 year.
I had US Health Care up to July and after this I have my Health Care here in U.K.
What exemption code to put on Form 8965-“C”?
Do I have to attach any proof to it?
If I am living abroad for past 2 years and come home to USA in September 2021 May I apply for affordable ObamaCare Act insurance at that time?
Yes you can. Moving back to the states qualifies you for special enrollment.