My 28 year old sister lives with me. She doesn't work, and she goes to a local community college to study English for adults (the tuition completely FREE of charge). I fully provide for her.
She has a green card, but she's not eligible for a Medicaid (since she's been in the US for less than 5 years). She makes no money, so presumably she is exempt from getting health insurance (no income waiver)
As far as I understand, my options are the following:
Claim her as my dependent, and buy her insurance. I'll get additional $1,000 in tax return (for having her as my dependent), and spend ~$2,000 on her insurance. My end of year balance would be MINUS $1,000
Claim her as my dependent, and NOT to buy her insurance. I'll get additional $1,000 in tax return (for having her as my dependent), and pay $1,500 no insurance penalty. My end of year balance would be MINUS $500 (slightly better)
NOT to claim her as my dependent. No additional tax return (since she is NOT my dependent), but also no penalty. My end of year balance would be $0
So the best strategy for me is NOT to claim her as my dependent, isn't it?
Essentially Obamacare act is forcing me NOT to claim my sister as my dependent (although I provide > 51% for her).
So, as a big sister I can provide for her, but NOT claim her as my dependent. Do I understand everything correctly?
As a side note, in order to claim somebody as a dependent, a tax filer has to cover only 51% of a dependent's annual expenses, not 100%. This logic does not jive with the idea that the minute I claim her as my dependent, I also become responsible for all her health insurance