US Senate Health Care Bill:

[sparks]

Senate Health Care Bill: Expats Exempt From Coverage Mandate

4. Expats exempt. As with the House bill, people who reside outside of the United States for at least 330 days in a 12-month period shall be treated as having minimum essential coverage for each of those 12 months. H.R. 3590, Section 1501( (proposing new Internal Revenue Code section 5000A(f)(4)).

http://knifetricks.blogspot.com/2009/11/senate-health-care-bill-expats-exempt.html

My question is how do you prove this and do you need to apply for an exemption. Someone suggested showing copies of your passport but mine wasn't stamped at all this year. The old FM3 might have worked but with the new cards there's nothing to show the IRS. Makes sense you apply when you do your taxes ??

Section 1501 (pages 320 – 341): People not carrying government approved health care will be fined $750 per person not covered per year (or $62.50 per month) beginning after 2016. This fine will rise yearly based on Cost of Living increases. The fine is only $95 per person in 2014 and $350 per person in 2015. The fine will be effective on anyone not covered for one month (three months in the case of Native Americans) and will not apply to prisoners, those will religious reasons for not being insured, individuals not lawfully present in the United States and hardship cases (determined by the Secretary on a case by case basis).

[howardF]

This is not a definitive answer, but the fines and proof of coverage will likely be administered through the IRS by adding the appropriate language to your tax filing. Those that live outside the US show an overseas address or so note on their returns that they live outside the country. I would think that would be sufficient proof that you're eligible for the waiver.

[solajijic]

This is not a definitive answer, but the fines and proof of coverage will likely be administered through the IRS by adding the appropriate language to your tax filing. Those that live outside the US show an overseas address or so note on their returns that they live outside the country. I would think that would be sufficient proof that you're eligible for the waiver.

I am figuring the FM3 or such will not be enough because it just says you have the right to reside in Mexico not that you actually reside here the required length of time. And the idea of a mail address with a forwarding service would not be sufficient to take you out of the compliance pool. I would assume if its the IRS that they will require proof of something which is asset based or an employment contract. Let's hope they don't require a copy of a property Deed or a Lease contract as proof of residence. That opens a whole can of worms, but that is just the kind of info the IRS would like to have on file.

[sparks]

This is not a definitive answer, but the fines and proof of coverage will likely be administered through the IRS by adding the appropriate language to your tax filing. Those that live outside the US show an overseas address or so note on their returns that they live outside the country. I would think that would be sufficient proof that you're eligible for the waiver.

Well I certainly can't change my US address to Mexico just for this. Maybe they'll allow two addresses and some proof of where you spend your time. Sounds like a can of worms until a bunch of Ex-Pats start going thru it

[gringal]

Considering that we have our passports stamped when we go back and forth, that might suffice. In addition, possessing an FM2 visa should surely do the job, since there are definite limits on how long we can be out of the country.

The people who have "theoretical addresses" in the U.S. for various reasons might find themselves in a bit of a pickle, though. It's always hard to have it both ways.

I would like to see a government informational site on the subject such as the one for Social Security in order to get definitive information on all this.

[sparks]

You must have to ask to have your Passport stamped. They haven't done mine lately. I can't read the stamps on my FM3 and soon there won't be any. Maybe just having an FM2/3 will be enough

[solajijic]

Gringal, I know quite a few FM2 holders who do not respect the time restrictions. They go right on by the border checkin buildings. Presently they haven't had too much trouble going in and out on FMM via plane, though that will change with better computerization.

We will know soon enough.

[MountainGal]

The IRS Form 1040 allows you to enter a mailing address as well as a physical address. There is also a box to check to state that you are a foreign resident. I would think everyone here who lives here full time and files a U.S. tax return would already be doing this. However, it does seem to me that the 330 days is a bit restrictive. Does this figure match the IRS requirement for declaring yourself as a foreign resident? I'm too lazy to dig into IRS regs to find out.

Let the fun begin!

[John Shrall]

I haven't read the whole health care bill either, but the reference to the 330 day residency rule currently applies to the ability to exclude foreign income. Who knows if the same rule will apply to the health care mandate but it does make sense to change your physical address to Mexico if indeed that's where you live. The IRS doesn't have a problem with that although you do need a US bank ABA number in order to receive any refund.

From irs.gov:

Foreign Earned Income Exclusion - Requirements

To claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction, you must have foreign earned income, your tax home must be in a foreign country, and you must be one of the following:

A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year

A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes an entire tax year, or

A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months

[elrich]

Check this out

http://www.collectivewizdom.com/HowtheHealthcareBillAffectsExpats.html

[sparks]

The IRS Form 1040 allows you to enter a mailing address as well as a physical address. There is also a box to check to state that you are a foreign resident. I would think everyone here who lives here full time and files a U.S. tax return would already be doing this. However, it does seem to me that the 330 days is a bit restrictive. Does this figure match the IRS requirement for declaring yourself as a foreign resident? I'm too lazy to dig into IRS regs to find out.

Let the fun begin!

That sounded good but I don't see either on the standard 1040

http://www.irs.gov/pub/irs-pdf/f1040.pdf

[Atlas]

I believe that those of us 65 and over alread have health insurance called Medicare.

[sparks]

I believe that those of us 65 and over alread have health insurance called Medicare.

Then it depends on the plan you are on and which plan meets the requirements. If you are really living here then plan A makes more sense but does it meet requirements?

[Jeannie]

I think this site explains it.

http://www.imtjonline.com/news/?entryid82=195267

[sparks]

I think this site explains it.

http://www.imtjonline.com/news/?entryid82=195267

Still doesn't explain how you prove your status. I wrote my tax man to see if he has a clue

[Atlas]

Isn't it a bit soon to worry? I think the rule is not in effect until 2014.

[sparks]

Isn't it a bit soon to worry? I think the rule is not in effect until 2014.

The Patient Protection and Affordable Care Act (Public Law 111-148) was signed into law by President Barack Obama on March 23, 2010. Along with the Health Care and Education Reconciliation Act of 2010 (signed March 30), the Act is a product of the health care reform efforts of the Democratic 111th Congress and the Obama administration. The law includes health-related provisions to take effect over the next four years,

I'm not sure what that means

[MountainGal]

That sounded good but I don't see either on the standard 1040

http://www.irs.gov/pub/irs-pdf/f1040.pdf

Right! I use Turbo Tax and I entered that information, but can't find it on the return itself... Maybe I'm thinking back to my State return when we moved here and had to declare foreign residency. Sorry...

[solajijic]

Isn't it a bit soon to worry? I think the rule is not in effect until 2014.

I guess it depends on your age at that point. If you have Medicare that year, okay to go. If you don't it may behoove you to put some things, like inmigrado status in place now. Forewarned is forearmed.

[howardF]

I am figuring the FM3 or such will not be enough because it just says you have the right to reside in Mexico not that you actually reside here the required length of time. And the idea of a mail address with a forwarding service would not be sufficient to take you out of the compliance pool. I would assume if its the IRS that they will require proof of something which is asset based or an employment contract. Let's hope they don't require a copy of a property Deed or a Lease contract as proof of residence. That opens a whole can of worms, but that is just the kind of info the IRS would like to have on file.

Most of the IRS tax law is based on trust, believe it or not. For instance if you claim business expenses, you simply have to state that you've incurred those expenses. Unless you are audited, no other proof is required. I hope and expect that the overseas exclusion will be handled similarly. This provision won't be in effect for another 3 or 4 years, so I wouldn't worry about it yet.

[jkgourmet]

Isn't it a bit soon to worry? I think the rule is not in effect until 2014.

Atlas is correct. The portion of the bill that applies to penalties for those that are uninsured does not apply until 2014.

[Intercasa]

The government knows when you come and go. It doesn't matter if your passport is stamped or not. Obtaining proof of leaving the country may be problematic as they could say the information is national security although info on entry is readily available, I've requested it for clients and received it. Some ways to prove stays in both countries might be:

Bank statements showing deposits made in person

Credit / debit card receipts showing purchases

FOIA (Freedom Of Information Act Requests) to CBP (Customs and border Patrol) who logs your every visit to the USA.

Boarding Passes

Remember the US is a voluntary system so it is what you report and it may only be an issue if they audit you. Also another thing to prove you are here almost all the time might be coverage here as well like private insurance or IMSS.

[MountainGal]

Just my opinion, but I believe (at first, anyway) they're going to be spending their time going after all of the people who really DO live in the States who aren't going to be in compliance. And I'm sure there will be a lot of them. Those of us ex-pats who file our tax returns and check the box, or whatever the come up with, declaring that we live outside of the U.S. are going to small fry compared to the rest.