2016 Tax Return with Newly Immigrated Spouse - Affordable Care Act

[MrsAzzi 1]

Hi all, 

 

I'm getting ready to file our 2016 taxes and I have a few questions. I am the US citizen and I married my foreign spouse in August 2015. I filed my 2015 taxes as "married filing separately" because we were still in the immigration process and he was outside of the US without a social security number and I did not want to file for an ITIN for him. He immigrated to the US in August 2016. When he got here, we chose not to pursue health care coverage for him for a few reasons. I was still under my parent's coverage because I am under 27 years old and I was not enrolled in my company's health care options. Also, my company's open enrollment period started in November 2016 for health care coverage that would take effect January 2017 and I could not add him to the 2016 year because the "significant life event" of us getting married took place in 2015 plus I wasn't even enrolled for myself for the 2016 year because of my other coverage. We decided to wait for November 2016 to use open enrollment at my company to purchase health care coverage for 2017 for the both of us.

 

I am aware that the Affordable Care Act fines individuals without health care coverage provided either through an employer or through the marketplace. For the 2016 filing year, how do I go about this? I'm going to file as "married filing jointly." Will we have a fine for him being without health care coverage for the 3-4 months of the 2016 year that he lived in the US? His first job started in December 2016 and his W-2 shows maybe one or two weeks of income for the 2016 year. 

 

Does anyone have any experience with this? I was hoping to use an online tax software to avoid having to use an accountant. Any suggestions on services or tools that would know or help answer my question if no one knows? 

 

To summarize:

• US citizen spouse had health coverage during 2016 through her parents
• Permanent resident spouse arrived in the US in August 2016
• Open enrollment opened November 2016 for January 2017 effective date
• Permanent resident was not employed until mid-December 2016
• Will file 2016 tax return "married filing jointly"
• Will there be a fine on our 2016 tax return for the newly immigrated permanent resident not having health coverage from arrival date to the end of 2016?

[misshepburn 52]

Hey there -- so I'm not an accountant but as someone who did not have insurance for a couple of years while ACA existed (though I have it now) I can tell you that if your husband is filing as single and is below a certain threshold with income he will not be fined. Since he only worked a couple of weeks in 2016 - its likely that his income alone won't go over the threshold. 

 

What could complicate your case is your income. Since I'm figuring you worked all of 2016 -- and you are filing jointly, then your income will be added to his. That could push you over the income threshold to avoid a fine.

 

What you could check (if you have tax software) is running your taxes both as married "filing separately" and "filing jointly" --- and see if that affects your overall taxes and any potential fine. 

 

An accountant or someone else who's been through this could probably give you a more concrete answer.  

[Suss&Camm 2,213]

30 minutes ago, MrsAzzi said:

Hi all, 

 

I'm getting ready to file our 2016 taxes and I have a few questions. I am the US citizen and I married my foreign spouse in August 2015. I filed my 2015 taxes as "married filing separately" because we were still in the immigration process and he was outside of the US without a social security number and I did not want to file for an ITIN for him. He immigrated to the US in August 2016. When he got here, we chose not to pursue health care coverage for him for a few reasons. I was still under my parent's coverage because I am under 27 years old and I was not enrolled in my company's health care options. Also, my company's open enrollment period started in November 2016 for health care coverage that would take effect January 2017 and I could not add him to the 2016 year because the "significant life event" of us getting married took place in 2015 plus I wasn't even enrolled for myself for the 2016 year because of my other coverage. We decided to wait for November 2016 to use open enrollment at my company to purchase health care coverage for 2017 for the both of us.

 

I am aware that the Affordable Care Act fines individuals without health care coverage provided either through an employer or through the marketplace. For the 2016 filing year, how do I go about this? I'm going to file as "married filing jointly." Will we have a fine for him being without health care coverage for the 3-4 months of the 2016 year that he lived in the US? His first job started in December 2016 and his W-2 shows maybe one or two weeks of income for the 2016 year. 

 

Does anyone have any experience with this? I was hoping to use an online tax software to avoid having to use an accountant. Any suggestions on services or tools that would know or help answer my question if no one knows? 

 

To summarize:

• US citizen spouse had health coverage during 2016 through her parents
• Permanent resident spouse arrived in the US in August 2016
• Open enrollment opened November 2016 for January 2017 effective date
• Permanent resident was not employed until mid-December 2016
• Will file 2016 tax return "married filing jointly"
• Will there be a fine on our 2016 tax return for the newly immigrated permanent resident not having health coverage from arrival date to the end of 2016?

Moving is also a qualifying event in most cases, so you probably could have enrolled you both, had you been enrolled in your company's healthcare provider program.

 

Short answer is yes you will have a fine from the month of September through December. It is up to you to file separately or jointly, although jointly will probably be most beneficial to you. Are you electing to treat your spouse as a tax resident for all of 2016? This would have the added benefit of being able to use the Foreign Earned Income exclusion (form 2555) (if your spouse had foreign income during 2016). If you are electing to do so you may not e-file since you will have to attach the election statement.

Also if you do make this election then you will have to file  form 8965 to exempt your spouse from health care coverage for the part of the year when they were not present in the US.

 

I hope that helps.