Does Obamacare penalty apply to a nonresident alien?

[jaehoppa 1]

Hi my wife came to the US on a visa waiver program (ESTA) and we just got married last month at court (I'm a US citizen).  We will be filing for her AOS soon but had a question about Obamacare. 

I get my insurance from my workplace but my wife is currently not enrolled yet.  

I was planning to go rest of the year without insurance and add her in January 2018.  

Would she be subjected to the 2.5% penalty for 2017 and would that be calculated based on our combined income or just her income (unemployed)?  

My adjusted gross income is around $130k and my wife is not working right now.  

My insurance premium would increase significantly if I add her but I think the penalty would be even higher.  Please let me know if I would be subjected to the 2.5% penalty.  Thanks.

 

 

 

Edited September 7, 2017 by jaehoppa

[Bzlibem 111]

4 minutes ago, jaehoppa said:

Hi my wife came to the US on a visa waiver program (ESTA) and we just got married last month at court (I'm a US citizen).  We will be filing for her AOS soon but had a question about Obamacare. 

I get my insurance from my workplace but my wife is currently not enrolled yet.  

I was planning to go rest of the year without insurance and add her in January 2018.  

Would she be subjected to the 2.5% penalty for 2017 and would that be calculated based on our combined income or just her income (unemployed)?  

My adjusted gross income is around $130k and my wife is not working right now.  

My insurance premium would increase significantly if I add her but I think the penalty would be even higher.  Please let me know if I would be subjected to the 2.5% penalty.  Thanks.

 

 

 

Nope. It doesn't apply until she gets her green card. When you file taxes there's an exemption 'non resident alien'

[Suss&Camm 2,213]

1 minute ago, Bzlibem said:

Nope. It doesn't apply until she gets her green card. When you file taxes there's an exemption 'non resident alien'

Non-resident alien for tax purposes is not the same as the immigration status. It's more complicated, although I don't have a definite answer for the OP on the penalty issue since it depends on factors such as how he will file taxes and when she came here etc.

[jaehoppa 1]

6 minutes ago, Bzlibem said:

Nope. It doesn't apply until she gets her green card. When you file taxes there's an exemption 'non resident alien'

 

1 minute ago, Suss&Camm said:

Non-resident alien for tax purposes is not the same as the immigration status. It's more complicated, although I don't have a definite answer for the OP on the penalty issue since it depends on factors such as how he will file taxes and when she came here etc.

 

I was also going to about filling out W-4.  In question number 3, there are check boxes for marital status but says below "If married, but legally separated, or spouse is a nonresident alien, check the “Single” box."  

 

Do I check the "single" box in this case?  

[MrHanky 1,377]

Actually they're not enforcing it since Trump took office

 

Here's some info from turbotax

https://ttlc.intuit.com/questions/3667663-irs-not-enforcing-obamacare-penalty-anymore

[f f 725]

look up the substantial presence test from the irs to see if she is a resident for tax purposes. if she is then she needs insurance or else you have a fee to pay.

 

on a side not why would you jot insure her. she is your wife and accidents happen all the time that can cause expensive hospital bills. especially when you make enough that they would go after you for it.

 

you are married you can not file as single you are either married filing jointly or married filing seperately.

[Bzlibem 111]

52 minutes ago, Suss&Camm said:

Non-resident alien for tax purposes is not the same as the immigration status. It's more complicated, although I don't have a definite answer for the OP on the penalty issue since it depends on factors such as how he will file taxes and when she came here etc.

I didn't know that but I filled taxes with that exemption last year and everything was fine  

[abum 324]

so prior to getting a GC, someone is considered a NON RESIDENT ALIEN? But if you have a GC and filed it like that, you would have abandoned your LPR status. Did i get that correct?

[jaehoppa 1]

12 minutes ago, Bzlibem said:

I didn't know that but I filled taxes with that exemption last year and everything was fine  

so on W-4 item #3, should I check single since she is a nonresident alien?

[f f 725]

7 minutes ago, abumiqdad said:

so prior to getting a GC, someone is considered a NON RESIDENT ALIEN? But if you have a GC and filed it like that, you would have abandoned your LPR status. Did i get that correct?

a person on a h1b visa is a non resident alien to uscis but if they meet the substantial presence test for the irs they are considered a resident alien för tax purposes.

 

from the irs

You will be considered a United States resident for tax purposes if you meet the substantial presence test for the calendar year. To meet this test, you must be physically present in the United States (U.S.) on at least:

1. 31 days during the current year, and
2. 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
   • All the days you were present in the current year, and
   • 1/3 of the days you were present in the first year before the current year, and
   • 1/6 of the days you were present in the second year before the current year.

https://www.irs.gov/individuals/international-taxpayers/substantial-presence-test

 

the irs and uscis use the same terms to mean different things.

 

using this I was able to claim a step child on my taxes as a dependent even though they did not have a greencard yet.

[Bzlibem 111]

UPDATE: so I didn't remember correctly the basis of my exemption. I checked and the one that I had was :

 

Exemptions based on legal status

You're exempt from the requirement if you are not "lawfully present" in the United States or if you are incarcerated. U.S. tax laws apply to everyone who earns income in the United States, regardless of whether they're here legally. Illegal or undocumented immigrants are required to file tax returns if their income is high enough, but they are exempt from the coverage requirement. They are also barred from obtaining health insurance through the online insurance marketplaces set up under the Affordable Care Act.

People who are incarcerated -- in jail or prison -- are exempt. This applies whether you have been convicted and are serving a sentence or are being held awaiting trial.'

that's from INTUIT page. https://turbotax.intuit.com/tax-tools/tax-tips/Health-Care/Are-You-Exempt-From-Health-Care-Coverage-/INF27678.html

Even though I-485 pending gives an immigrant some kind of 'protective status' I guess that for IRS it's still considered undocumented 

[Bzlibem 111]

17 minutes ago, jaehoppa said:

so on W-4 item #3, should I check single since she is a nonresident alien?

I don't have an answer to your question  we did taxes while I-485 was pending. I remember that I had to file for ITIN number alongside the tax return (at the IRS office) and I had to attach a statement that I'm electing to be treated as a resident alien for tax purposes. We had to do that all because I wasn't eligible for SSN and I couldn't file taxes unless I get either or numbers. 

We did our taxes through Turbotax but because of ITIN application we didn't file online - we filed at IRS office 

[jaehoppa 1]

Does anyone know if she would even be eligible to be added to my Cigna insurance plan because she doesn't have legal status here yet and doesn't have SSN??  

[MrHanky 1,377]

15 minutes ago, jaehoppa said:

Does anyone know if she would even be eligible to be added to my Cigna insurance plan because she doesn't have legal status here yet and doesn't have SSN??  

Probably not, but I don't think anyone here works for Cigna, you can try contacting them and asking.

 

[f f 725]

she can be added no issues as long as it is either special enrollment or open enrollment. a ssn or proof of legal status is not needed. I have done this it does work.