Will my fiancée and I be penalized taxwise if she hasn't had health insurance coverage?

Will my fiancée and I be penalized taxwise if she hasn't had health insurance coverage?

by William L. Stunkel, CPA | Feb 07, 2018

My fiancée and I will be getting married later this year. I have health insurance through my employer. Due to her income, health insurance is too expensive and she does meet the criteria to be exempt from the penalty. I cannot add her to my health insurance until we are married. Since she will have been without health coverage for a portion of 2018, until we are married, will we as a couple have to pay a penalty for the months that she was not covered?

Exemptions from the Individual Shared Responsibility payments (i.e., "the penalty") are based on your filing status used for the tax return. Therefore, if you are married as of Dec. 31, 2018, then your status and all calculations are done based on that status for the entire year of 2018. Thus, any penalty exemptions would be looked at jointly for the entire year based on your household, which includes your spouse regardless of whether you choose to file jointly or separately for the actual tax return for 2018 that you file in 2019. Based on your joint income, she may still qualify, but you would have to determine that. You should also look into whether any other exemptions may apply for her other than just the ones based on income.

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Answered by: William L. Stunkel, CPA, is is director of small business services with Holsinger PC in Wexford, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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