A friend of mine has a DOE pension. He now lives in Mexico as a naturalized citizen. And has no plans to return to the USA.
He is struggling with the $300 a month ACA premiums.
May be a mute point with the current administration. But I have read that it may take two years before ACA can be repealed.
He doesn’t have internet to ask this question. And I agreed to help him.
Thank you.
If I’m reading this PDF document correctly, he is not required to obtain ACA insurance.
"U.S. citizens living abroad are subject to the individual shared responsibility provision. However, U.S. citizens who are not physically present in the United States for at least 330 full days within a 12-month period are treated as having minimum essential coverage for that 12-month period regardless of whether they enroll in any health care coverage.
In addition, U.S. citizens who are bona fide residents of a foreign country (or countries) for an entire taxable year are treated as having minimum essential coverage for that year. In general, these individuals qualify for the foreign earned income exclusion under section 911."
BTW, it would be a moot point, not a mute point.
By the way - if he lived in the US and couldn’t afford the monthly premium to carry insurance, he doesn’t have to have insurance, he can pay the yearly penalty:
“The annual fee for not having insurance in 2016 is $695 per adult and $347.50 per child (up to $2,085 for a family), or it’s 2.5% of your household income above the tax return filing threshold for your filing status – whichever is greater.”
No. The USA mexico pensions agreement is based on residency years and not current citizen ship. He wouldn’t be undoing his past residency/ citizenship… is his claim is from the past not the present. There might be a fine grain benefit, eg waving the ACA penalty ??
Although I wonder if this means that he would not have the right to return to USA for life saving treatment he wouldn’t get, or wouldnt want to risk, in mexico.
A US citizen who attempts to renounce their citizenship may find they have to pay an enormous tax bill, including all taxes of future pension payouts.
Do you have a cite for that? Why would they have to pay taxes on future pension payouts?
So he doesn’t want to pay for insurance but wants to “retain the right to return to USA for life saving treatment he wouldn’t get, or wouldnt want to risk, in mexico”? Paid for by, say, me and the rest of us?
We don’t know if that’s what the “friend” intended, as the OP has not returned.
I appreciate your contributions to this thread. And I will relay them to him.
I don’t know him that well. But, I believe if there was a grave situation with health, he would prefer to weather it out here.
Not sure what difference it would make. He’s earning a pension in USA, so regardless whether he lives there or is a citizen he continues to pay taxes there. If ACA is a tax (wasn’t that the Supreme court decision?) then wouldn’t he still have to pay?
If he lives outside of the USA the only taxes he has to pay are those over a MAGI of approximately $90,000. As he’s a pensioner, he’s probably not making this, meaning he has no taxes to pay.
Having just finished a five year overseas stint myself, I can attest that ObamaCare is not needed outside of the USA.
I don’t know. I file US tax returns and I don’t recall it ever coming up. Of course, I am covered by our Quebec medicare so I don’t suppose I would be liable in any case.
If I moved to the US (which I was seriously contemplating doing until Nov. 9, I would have to get insurance. My Canadian pensions (employee and also provincial) would continue, but subject to a flat 25% tax, which would then become tax credits against US tax.
But no one has suggested I should pay any fees to the US.
yes, you are reading it correctly. Overseas residents don’t pay the tax, and they notify the IRS tthat they are exempt.
It’s easy…-When you file your 1040 tax form, you add one page, called Form 8965, on which you check option “C”.
If the OP ever comes back: do your friend a favor and tell him.
Why put that ridiculous interpretation of the OP in quotation marks as if anyone in this thread, besides you, uttered those words?
It would be pretty stupid for the OP’s friend to continue paying for US health insurance since they aren’t required to and, as stated right in the OP, have no plans to return to the US.
What part am I missing where they said they want you pay for their healthcare? Because it sounds more like you expect them to pay for yours.
Not just why, but how? How do you calculate taxes on future pension payments, since nobody has any idea if you’re going to die tomorrow or live another 40 years? :dubious:
Yes, that was my father’s situation. However, he was over 65 so I assume Medicare covered what he needed, no ACA necessary. I assume the OP’s friend then is under 65?
Considering Canada was charging 25%, and knowing the IRS always wants their pound of flesh too - I find it hard to believe that US income under $90,000 would pay no taxes.
Trying to find the specific cite, but I’m recalling the concept of deferred compensation. While foreign income exclusion may apply, an expat is still receiving a US-based income (retirement).
In trying to find the cite there is also the Reed Amendment. That says if renouncing US citizenship has as its intent to avoid taxation (is ACA a tax here?), the IRS can play hardball with you and invoke the Reed Amendment, meaning you can never, ever return to the US under any circumstance.
I’ll keep digging for that cite.
I did not put a ridiculous interpretation in quotation marks, I quoted. My error is that I thought the text I quoted was the OP, but it was not. It was not, however, me, “utter[ing] those words,” but **Isilder. ** I wouldn’t bother to point this out except that SDMB has a rule about not creating pretend quotes.
I have no idea where you get the idea that I want them to pay for my healthcare. The quote, which I thought mistakenly was the OP’s, suggested that the friend might wish not to pay for US health coverage, but might wish to return for treatment he wouldn’t get or risk in Mexico. That raised for me the question of who would pay for that. As to your idea that I think the friend should pay for my health care, that’s true in a vague and general way insofar as low-risk subscribers supporting the pool, but not at all what I was asking. My coverage comes from my employer, not the ACA.
But you mucked up your attempt at quoting Isilder, who said, “Although I wonder if this means that he would not have the right to return to USA for life saving treatment he wouldn’t get, or wouldnt want to risk, in mexico.”
Your post said, “So he doesn’t want to pay for insurance but wants to ‘retain the right to return to USA for life saving treatment he wouldn’t get, or wouldnt want to risk, in mexico’?”
So you added “retain” to the quote and changed the meaning of the quoted text.
To the OP: why don’t you ask Valdas Adamkus whether he is still receiving his U.S. government pension?
(I’ve always wondered whether he was the only foreign head of state eligible for a U.S. government pension.)
To those wondering about the requirement to pay U.S. taxes when living abroad - even if you don’t meet the criteria for days spent outside the U.S. in any given year, typically the way it works is that you get credit for taxes paid to the country where you reside (with some tweaks according to the terms of various bilateral dual taxation agreements). So if you’re already paying taxes somewhere like an EU country or Canada, you are likely not to owe additional U.S. taxes. Here’s more info, from the horse’s mouth.