I am international student in Massachusetts, USA. I was having overseas (from India)Health insurance during year 2010 and my university did allowed it. I filled the income tax for year 2010, and now I have received a Notice of Levy. This notice is regarding health insurance is not valid in state of Massachusetts USA and I have to pay penalty of 1000 $.

It also states that if I don't pay the penalty or appeal to this notice my Bank accounts will be blocked.

Are overseas health insurances not valid in Massachusetts state?
What should I do about this notice?

R/
Aadesh.

Aadesh:

As an international student on a F-1 visa, by law, you are NOT a resident of Massachusetts, so the mandatory insurance requirement does NOT apply to you.

Contact the Mass tax authorities and discuss this with them. You may have to change your return to non-resident status and send them a cleat copy of your visa, but that should resolve the issue in your favor.

Atlanta Tax Expert,
Thanks for replying! I am staying in Massachusetts from Aug 2008 as an F1 student. I "read" somewhere that if a person stay's in any state from more than 90 days he is considered as a resident of the state. Is this true? If not can you point me to a document that contains the rules for determining if a person is a resident of a state or not. It would be helpful for my case.

Thanks again,
Aadesh.



R/
Aadesh.

Ignore what you read somewhere. Follow what AtlantaTaxExpert has to say.

Aadesh:

Historically, international students receives non-resident status throughout their stay while they are attending school.

Now, if you start working on OPT, THEN the state may reconsider your status and convert you to a resident. Otherwise, to my knowledge, your student status should exempt you from the mandatory insurance requirement.

Make the call, and let us know what they say.

Thank you MukatA & Atlanta Tax Expert for your responses.

@ Atlanta Tax Expert,
Now this does make change to my case. I was working on CPT from Jan 2010 till May 2010, from May 2010 till year end I worked on OPT. So does this mean that might be considered as a resident? I have faxed them the documents that they had asked for and will update you the response.
Can you point me the document that contains the rules for determining if a person is a resident of a state or not.

R/
Aadesh.

"•Taxpayers who are nonresident aliens for federal purposes are generally nonresidents for Massachusetts purposes since the Substantial Presence Test for federal resident alien status has the same threshold as the 183 days of physical presence in Massachusetts for Massachusetts resident status." Residency Status - Massachusetts Department of Revenue - Mass.Gov

Thanks, MukatA, for the reference.

Again, make the call to the Massachusetts Tax department and I believe you will get the relief you seek.

Thank you for your responses. I will keep you posted on the developments.


Aadesh.