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ACA subsidies -- income earned while non-resident

ACA subsidies -- income earned while non-resident

Old Sep 25th 2017, 4:06 pm
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Default ACA subsidies -- income earned while non-resident

All,

I arrived as a new immigrant on an IR-1 with my family (all USCs) a few days ago. I currently have short-term health insurance for all of us, but am looking at buying an ACA plan ASAP, which in practice means commencing November 1st.

I would obviously like to have the plan subsidised.

I'm interested to know whether I should include income earned as a non-resident alien (my job in the UK) when calculating my MAGI for ACA subsidy purposes. Hopefully this income will be included in the calculation, since I haven't had any income since becoming resident (and therefore would be under the subsidy 'floor').

My understanding is that, because I'm married to a USC, I can elect to be treated as a resident alien for the entire tax year 2017 when I complete my tax return for the year. In this case, can I check the following are correct?

- My income earned while a non-resident alien during 2017 would be included in my 2017 tax return, and therefore my MAGI?

- I would nonetheless be able to exclude this income from my taxable income using the foreign earned income exclusion, or at least as much as the pro-rated exclusion would cover? (Foreign earned income is taken into account for MAGI subsidies.)

Thanks for your help.

Kind regards,
CF

Last edited by chesterton_fan; Sep 25th 2017 at 4:08 pm. Reason: early post cut-off
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Old Nov 16th 2017, 6:05 pm
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Default Re: ACA subsidies -- income earned while non-resident

Hi, Did you find out more about the foreign earned income? I am sponsoring my mum to come here (I am USC) and am just waiting for interview date. Hopefully she will be here by Feb/March and she needs health insurance. When I put in her info for an idea of cost and tax credits she could have it said she needed to have a certain amount of income including foreign income to get the subsidy/credit. I'm not sure how to show that or whether they accept her UK paystubs etc but as she is working until she moves here she would have enough foreign earned income from her job to allow her a monthly credit through ACA. Otherwise with 0 income she has to pay an insane amount each month!
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Old Nov 16th 2017, 7:24 pm
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Default Re: ACA subsidies -- income earned while non-resident

Originally Posted by chesterton_fan View Post
My understanding is that, because I'm married to a USC, I can elect to be treated as a resident alien for the entire tax year 2017 when I complete my tax return for the year. In this case, can I check the following are correct?

- My income earned while a non-resident alien during 2017 would be included in my 2017 tax return, and therefore my MAGI?

- I would nonetheless be able to exclude this income from my taxable income using the foreign earned income exclusion, or at least as much as the pro-rated exclusion would cover? (Foreign earned income is taken into account for MAGI subsidies.)
CF
This is an old post, so you may have already found your answer. Nonetheless, if you are claiming to be treated as a resident alien for all of 2017, how can you claim FEIE (foreign earned income exclusion)? To use the FEIE, one must be resident abroad for 330 days minimum during the year, and you will be claiming you were resident in the US for the entire year. You may be able to use FTCs (foreign tax credits).
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