Expat Community > Ecuador

MovingOut
Joined 2013
Posts: 38

Obamacare penalty doesn't apply

10 years ago

Here is the response I received from the IRS when I asked about the ObamaCare requirement for having insurance if one is a foreign resident. I asked because I will be dropping Medicare.

We will assume that you qualified for Medicare as a U.S. citizen or resident alien in those years prior to your retirement. Even though you are a permanent resident of Ecuador you may want to continue to file U.S. income tax returns and report your worldwide income. In filing these returns you may need to prove that you still maintain the minimum requirement of health insurance coverage to avoid a penalty on your tax return.
However, U.S. citizens who are not physically present in the United States for at least 330 full days within a 12-month period are treated as having minimum essential coverage for that 12-month period. In addition, U.S. citizens who are bona fide residents of a foreign country for an entire taxable year are treated as having minimum essential coverage for that year. Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad, provides additional information on income and other filing requirements for U.S. citizens and resident aliens. Therefore you would not be required to maintain your coverage under Medicare.

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