8857 / Are U.S. citizens who are not U.S. residents subject to the shared responsibility penalty?
In general, yes. However, a taxpayer may be exempt if he or she qualifies for the foreign earned income exclusion under IRC Section 911. Therefore, if a U.S. citizen who is living abroad has not been physically present in the U.S. for at least 330 full days within a twelve-month period, the individual will be treated as having obtained minimum essential coverage for that twelve month period. Further, U.S. citizens who are bona fide residents of foreign countries for an entire tax year will be treated as having obtained minimum essential coverage for the year.1
U.S. citizens who do not meet the tests outlined above are required to maintain minimum essential health coverage (which can include group health coverage provided by a foreign employer), qualify for an otherwise applicable exemption (see Q 8847) or make the shared responsibility payment.
1. IRC § 911(d), TD 9632.
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