Author Topic: Marriage w/Income and Insurance Gap  (Read 347 times)

Hargrove

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Marriage w/Income and Insurance Gap
« on: January 27, 2019, 10:41:01 PM »
Hello Mustachians! Can someone please tell me what the tax procedure would be regarding the health insurance penalty for someone who

Married late 2018
One spouse made 14k
Low-earning spouse had no health coverage until just before marriage
Low-earner income would probably get a hardship exemption
Married couple's income would definitely not qualify for hardship exemption

Turbotax uncritically accepted "hardship exemption" without an explanation, and I'm not sure that's a good recommendation for this scenario or not. Basically, would there be a penalty? She couldn't get insurance at work and didn't have the money to buy it, though I don't know if she could have gotten it for free. Once she qualified, she got insurance. Thanks for your help.
« Last Edit: January 28, 2019, 04:55:12 PM by Hargrove »

Sibley

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Re: Marriage w/Income and Insurance Gap
« Reply #1 on: January 29, 2019, 06:53:26 PM »
Could be wrong, but I think I read that the IRS was not enforcing that due to one of Trump's executive orders. However, since you're fundamentally telling the truth, if you're questioned you would have decent evidence to support your position that the lower earner would qualify for an exemption. I would guess you're ok.

Hargrove

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Re: Marriage w/Income and Insurance Gap
« Reply #2 on: January 29, 2019, 10:32:02 PM »
I reread it, and there's an option (not under "hardship") for listing the months it "wasn't affordable" (by person).

So, before we were married, she couldn't have afforded it. Even if you add our incomes and divide by half (something the IRS does elsewhere), I doubt any insurance was available at 8% of that.
So, I think we're ok with "wasn't affordable" for her uninsured months.

I was going to get her on my insurance when we were married, but once she qualified for insurance at work, we got her on that, and realized later it was better than the insurance I have anyway. I guess I can explain all that if I have to at some point?

The Trump executive order did not result in the IRS abandoning enforcement, according to the IRS. They also reiterated they will not accept tax returns without a declaration of health care status this year.

Sibley

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Re: Marriage w/Income and Insurance Gap
« Reply #3 on: January 30, 2019, 08:13:22 AM »
They're not accepting blank responses, you're not leaving it blank - you'd be saying spouse didn't have insurance all year, and qualified for an exemption. So that gets you past the initial check.

Really, as I see it, you have a legit reason that she didn't have insurance, so it's just figuring out how to best fill out the forms so the IRS will leave you alone.