Health Insurance Penalty for Wife and Daughter

[r060106 109]

Hi all,

I'm experiencing an issue regarding the health insurance penalty for my wife and daughter during the 2014 tax year and am wondering if anyone else is experience the same issue as me.

Here's our background: my wife has has been a legal permanent resident since September 23 and my daughter has been here with me since that date as well (having received her CRBA in May 2014 after being born in April 2014). Neither of them were covered under my company's health insurance plan because the way my HR sets it up is that in the absence of a social security number family members can't be added to an employee's insurance. And given that the 30 day window to add them after each life qualifying event (marriage and then birth of a child in this case) ended before they each had social security numbers, I couldn't add them until this past December. Not even thinking that I could get them coverage on the federal exchanges, I forgot about this route and they didn't have coverage at the end of 2014.

With that said, at the moment I'm working on my 2014 taxes and Turbo Tax is telling me that neither my wife nor my daughter qualify for any of the individual mandate exemptions, either due to their foreign residency or because, in my wife's case, she wasn't a legal resident for most of the year. Their reasoning is that both of them needed to be in Poland the entire year, which doesn't make sense to me. As a result, Turbo Tax is having me fill out the number of months insured to calculate the penalty, which for them would have been none. However, I'm a little perplexed by this as first of all, my daughter wasn't even born until April 1, and my wife wasn't a legal resident until September 23 officially. Not to mention the fact that they were both covered by Polish national health insurance provided by the Polish government for all of my daughter's life and all of my wife's time in Poland until September. To illustrate this, within the page where you can specify the months they were insured I was thinking of selecting all months other than Sept-Dec, as the rest of the months they were technically insured.

Given our circumstances, has anyone else run into this same issue with their family coming over to the US mid or late 2014 and then not being able to insure them? If so, how do you plan on dealing with it on your taxes when it comes to the individual mandate the respective penalties? Am I just going to have to pay the penalty and call it a day? Or am I overthinking the exemptions? Please let me know your thoughts. I'm very curious if a lot of others are experiencing this same issue. What does everyone else think?

Thanks

[Moustafa/Crystal 65]

I think your siuation is too complicated for TurboTax. Turbo Tax is for people without any special situations like yours. I would go to a tax preparer that can talk with you about your unique situation and can manually over ride forms that fill in automatically on Turbo Tax.

[MIDUVIL 34]

You can also ask your questions on the support tchat of turbo tax. If you have turbo tax plus, you can speak to an expert...

[Gosia & Tito 199]

Hi all,

I'm experiencing an issue regarding the health insurance penalty for my wife and daughter during the 2014 tax year and am wondering if anyone else is experience the same issue as me.

Here's our background: my wife has has been a legal permanent resident since September 23 and my daughter has been here with me since that date as well (having received her CRBA in May 2014 after being born in April 2014). Neither of them were covered under my company's health insurance plan because the way my HR sets it up is that in the absence of a social security number family members can't be added to an employee's insurance. And given that the 30 day window to add them after each life qualifying event (marriage and then birth of a child in this case) ended before they each had social security numbers, I couldn't add them until this past December. Not even thinking that I could get them coverage on the federal exchanges, I forgot about this route and they didn't have coverage at the end of 2014.

With that said, at the moment I'm working on my 2014 taxes and Turbo Tax is telling me that neither my wife nor my daughter qualify for any of the individual mandate exemptions, either due to their foreign residency or because, in my wife's case, she wasn't a legal resident for most of the year. Their reasoning is that both of them needed to be in Poland the entire year, which doesn't make sense to me. As a result, Turbo Tax is having me fill out the number of months insured to calculate the penalty, which for them would have been none. However, I'm a little perplexed by this as first of all, my daughter wasn't even born until April 1, and my wife wasn't a legal resident until September 23 officially. Not to mention the fact that they were both covered by Polish national health insurance provided by the Polish government for all of my daughter's life and all of my wife's time in Poland until September. To illustrate this, within the page where you can specify the months they were insured I was thinking of selecting all months other than Sept-Dec, as the rest of the months they were technically insured.

Given our circumstances, has anyone else run into this same issue with their family coming over to the US mid or late 2014 and then not being able to insure them? If so, how do you plan on dealing with it on your taxes when it comes to the individual mandate the respective penalties? Am I just going to have to pay the penalty and call it a day? Or am I overthinking the exemptions? Please let me know your thoughts. I'm very curious if a lot of others are experiencing this same issue. What does everyone else think?

Thanks

Turbo Tax can't deal with cases like yours (or newly arrived residents) automagically, but it might be possible to override it by manually going thru the software. I haven't had the specific situation as when my wife arrived Obamacare penalties were not yet in place.

I'd think that in the next several weeks others here are going to post similar questions and eventually someone would post specific direction.

What I did was to go over the IRS documentation to figure out what if anything applied to an immigrant with X number of days in the country, double taxation treaties, etc., etc.

But it took time and effort, that you might not want to spend.

Then I just use the Turbo Tax product to do the forms I knew I needed. It was relatively simple once I knew what applied. You just need to be careful to know where you would need to make adjustements because the sofware will not do it automatically.

Unless you want to tackle it yourself, I'd recomment a tax preparer (but not HR Block or Hewitt, they will not know how to deal with that either because they use software as well and it's not designed to handle the small number of cases such as yours).

I'd go to an actual tax/accountant.

Someone has suggested TurboTax chat/support, you might find an answer there as well, but the relatively small number of cases that might be like yours, it might not.

They are fitted to advice the 99% of cases that are not like yours, IMHO...and it might be moeny best spent on the tax preparer.

Edited January 31, 2015 by Gosia & Tito

[r060106 109]

Turbo Tax can't deal with cases like yours (or newly arrived residents) automagically, but it might be possible to override it by manually going thru the software. I haven't had the specific situation as when my wife arrived Obamacare penalties were not yet in place.

I'd think that in the next several weeks others here are going to post similar questions and eventually someone would post specific direction.

What I did was to go over the IRS documentation to figure out what if anything applied to an immigrant with X number of days in the country, double taxation treaties, etc., etc.

But it took time and effort, that you might not want to spend.

Then I just use the Turbo Tax product to do the forms I knew I needed. It was relatively simple once I knew what applied. You just need to be careful to know where you would need to make adjustements because the sofware will not do it automatically.

Unless you want to tackle it yourself, I'd recomment a tax preparer (but not HR Block or Hewitt, they will not know how to deal with that either because they use software as well and it's not designed to handle the small number of cases such as yours).

I'd go to an actual tax/accountant.

Someone has suggested TurboTax chat/support, you might find an answer there as well, but the relatively small number of cases that might be like yours, it might not.

They are fitted to advice the 99% of cases that are not like yours, IMHO...and it might be moeny best spent on the tax preparer.

That all makes sense. Thank you. My dilemma is this: it might cost me more money to get the taxes prepared than I would have lost with the penalty (about $150). This is so dumb and I just want to file to get the refund. Thanks again everyone. I appreciate the input.