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I am a US Citizen and married a J-1 visa holder at the end of December 2017.

Facts:

  • I have had healthcare coverage the entire time in 2017 and currently in 2018.
  • My wife is still a J-1 with a pending 2-year waiver rule. When that clears from USCIS we will immediately apply for adjustment of status (AOS). She has been in and out of the US on various J-1 statuses for 3 calendar years. She pays FICA taxes.
  • We will be filing a joint return for tax year 2017.
  • As a requirement for J-1 entry, she purchased private insurance for a year which ends at the end of March. I am not sure if it is considered basic essential coverage or not.

Questions:

  • Is my wife's insurance sufficient, or was she suppose to now be on my insurance (or a marketplace etc) at the beginning of 2018?

  • Since she is technically not a permanent resident yet, but we have permanent resident 'intent' does that now make this a requirement?

There is a similar question here but both were visa holders: Do I have to pay a Health Care Tax Penalty for my F-1 spouse?

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  • Residency in immigration terms and residency in tax terms may not be the same, it would probably be worth talking to a tax specialist.
    – CactusCake
    Commented Mar 7, 2018 at 22:02
  • When you say "She has been in and out of the US on various J-1 statuses for 3 calendar years", do you mean she came in J-1 in 2016, and was also here in some parts of 2017 and 2018? Otherwise, what are the 3 calendar years? Also, has she been in F or J status before that?
    – user102008
    Commented Mar 8, 2018 at 14:59
  • @user102008 She was a J-1 previously, returned home to finish school for a year, and then came back for additional training. 2015, 2017, 2018.
    – Shawn
    Commented Mar 8, 2018 at 18:36
  • @Shawn: Is she a J-1 student, or some other J-1?
    – user102008
    Commented Mar 8, 2018 at 19:37
  • @user102008 J-1 Trainee
    – Shawn
    Commented Mar 9, 2018 at 0:51

1 Answer 1

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J-1s who are not students are considered teachers or trainees, who are exempt individuals (exempt from the Substantial Presence Test) during the time on J-1 unless they have been exempt individuals for some part of 2 of the past 6 calendar years.

Your wife would be an exempt individual on her time on J-1 in 2015 and 2017, but not 2018 (since she was already an exempt individual for some part of 2 of the past 6 calendar years). Since her time on J-1 in 2015 and 2017 did not count for the SPT, and she was not in the US in any non-J-1 status in those years, she did not pass the SPT for those years, and so she was a nonresident alien for the whole year for those years. Her time in J-1 or any other status in 2018 would count for the SPT, and so she would likely pass the SPT for 2018, and be a resident alien for 2018.

There is an exemption from the penalty for nonresident aliens. This is true even if you use Nonresident Spouse Treated as Resident to treat her as a resident alien for the whole year and file jointly. See this section of the Form 8965 instructions:

Citizens living abroad and certain noncitizens — You were:

[...]

  • A nonresident alien, including [...] (2) a nonresident alien or dual-status alien who elects to file a joint return with a U.S. spouse. [...]

So she can claim this exemption for every month of 2017 for you guys' Form 8965.

For 2018, she will probably have a penalty for months where she doesn't have insurance, as I don't think she qualifies for any other exemption.

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  • AFAICS if she hurries and gets qualifying coverage for March, even part of March, and the rest of the year, the two-month 'short gap' in Jan. and Feb. is exempted from penalty.
    – dave_thompson_085
    Commented Mar 9, 2018 at 22:31

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