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PATAX
Level 15
11-30-2023
07:54 AM
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A health insurance broker asked me this question. If anyone can help then I would appreciate it: "If I have a family of five, one parent four children, two of the children live at home, have their own full-time jobs but living at home, same address as the mother who does not claim them on her tax return, but on the health insurance application asks the question all persons living with you, to count their income. The two dependents file their own tax returns. The mother does not claim them on her tax return. I think these dependents can enroll in their own policy age 25 and 26 and get the aptc in addition to the mother filing her own taxes. Do you know how this is treated?" Thanks.
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TaxGuyBill
Level 15
11-30-2023
10:59 AM
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@PATAX wrote:
one parent four children
two of the children live at home, have their own full-time jobs but living at home, same address as the mother who does not claim them on her tax return
The two dependents file their own tax returns. The mother does not claim them on her tax return.
I think these dependents can enroll in their own policy age 25 and 26 and get the aptc in addition to the mother filing her own taxes.
It's probably because that is from an insurance person and not a tax person, but the determination needs to be made if the parent is ABLE to claim the kid as a "dependent". If the kids are not ABLE to be claimed, they are not a "dependent".
*IF* the kids are NOT able to be claimed as dependents, they can be completely separate. The kids can have separate policies and any Premium Tax Credit is based only on their own income with a household size of one person. The parent would have a household size of three and the non-dependent kids don't affect the parent's insurance or tax situation at all.
The parent has the OPTION to include the non-dependent kids on a "family" policy until the kid turns age 26. *IF* that is done, hypothetically the Healthcare Marketplace SHOULD send the parent a separate 1095-A based on her household size of three and based on her income, and it SHOULD send separate 1095-As to each non-dependent kid based on their own income (so the Marketplace would ask for everybody's income separately). HOWEVER, that is often not done. I am unsure if it is a Marketplace error or if it is an error for who fills out the application. *IF* all five people end up on the same 1095-A, you SORT-OF should include everybody's income on the application. It gets more complicated than that, but including everybody's income would end up a closer result than just including the parent's income.
If the kids are ABLE to be claimed as dependents but for some reason the mother is not actually claiming them, that has some additional snags, but that is uncommon so I won't go into that.
Does that help?
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TaxGuyBill
Level 15
11-30-2023
10:59 AM
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@PATAX wrote:
one parent four children
two of the children live at home, have their own full-time jobs but living at home, same address as the mother who does not claim them on her tax return
The two dependents file their own tax returns. The mother does not claim them on her tax return.
I think these dependents can enroll in their own policy age 25 and 26 and get the aptc in addition to the mother filing her own taxes.
It's probably because that is from an insurance person and not a tax person, but the determination needs to be made if the parent is ABLE to claim the kid as a "dependent". If the kids are not ABLE to be claimed, they are not a "dependent".
*IF* the kids are NOT able to be claimed as dependents, they can be completely separate. The kids can have separate policies and any Premium Tax Credit is based only on their own income with a household size of one person. The parent would have a household size of three and the non-dependent kids don't affect the parent's insurance or tax situation at all.
The parent has the OPTION to include the non-dependent kids on a "family" policy until the kid turns age 26. *IF* that is done, hypothetically the Healthcare Marketplace SHOULD send the parent a separate 1095-A based on her household size of three and based on her income, and it SHOULD send separate 1095-As to each non-dependent kid based on their own income (so the Marketplace would ask for everybody's income separately). HOWEVER, that is often not done. I am unsure if it is a Marketplace error or if it is an error for who fills out the application. *IF* all five people end up on the same 1095-A, you SORT-OF should include everybody's income on the application. It gets more complicated than that, but including everybody's income would end up a closer result than just including the parent's income.
If the kids are ABLE to be claimed as dependents but for some reason the mother is not actually claiming them, that has some additional snags, but that is uncommon so I won't go into that.
Does that help?
