Full-year nonresidents of California filing Form 540NR, while not subject to the state's requirement that residents have qualifying health care coverage, nonetheless are subject to the same reporting requirement as residents.
Thus, the nonresident return requires you to indicate whether or not the taxpayer and their family had full-year minimum essential coverage (MEC), and if not to complete Form 3853, Health Coverage Exemptions and Individual Shared Responsibility Penalty.
First, you will need to indicate in the California nonresident return whether or not the taxpayer and their family had full-year MEC. To do this, from the California Return menu select:
- Health Care Shared Responsibility Tax (Form 3853)
- Did the Taxpayer have Full year minimum essential health care coverage for all members of the household? - If everyone in the household had full-year MEC, click Yes then click Continue and you're done with the healthcare section of the return.
If the answer to the healthcare question is No, you'll need to complete Form 3853 and you will indicate that they are exempt from the MEC due to being nonresidents.
For a nonresident, completing Form 3853 is a two-step process:
- You will indicate the nonresident exemption for the months that exemption applies.
- You will indicate the months the taxpayer had either MEC or an exemption.
Step 1 - indicating the months the nonresident exemption applies.
- Part III - Coverage Exemptions
- Enter California Coverage Exemptions for Household members that were claimed on Federal return
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Part III - California Coverage Exemptions - You will need to click this for each individual in the return and indicate their coverage or exemption status for either the full year or for each month, as applicable.
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Select the individual - Select the individual whose coverage status you are indicating.
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Full Year - If they had full year coverage or are covered by the nonresident exemption, click the drop down menu and select "Health Coverage" or "Nonresident or Part year resident".
or -
January - December - For a given month, if the individual had health coverage or are claiming an exemption, click that month's drop down menu and select "Health Coverage" or "Nonresident or Part year resident".
When finished with everyone in the return, return to the CA Form 3853 Healthcare menu.
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Select the individual - Select the individual whose coverage status you are indicating.
Step 2 - indicating the months the taxpayer had either MEC or an exemption.
- Shared Responsibility Payment
- Shared responsibility payment for individuals claimed on Federal return
- Shared Responsibility Payment - You will need to click this for each individual in the return and indicate Yes for each month of the year.
Additional Information: