Form 1095 when adult child is included

[Greta]

When I prepare taxes for self-supporting young adult who is still on his parents' ACA 1095 form, how do I enter that 1095 information on his return?

[TaxGuyBill]

The child is not eligible to be a dependent, right?

Was Advance credit paid (column C of the 1095-A)?

For possible purposes of best tax outcome: (1) Did parents or child collect Unemployment in 2021?  (2) Who has the lowest poverty percentage (line 5 of Form 8962)?

[Greta]

Son is not eligible to be a dependent. He as well as parents are self-employed, and after all deductions, they all are low-income and (in hinds-sight) could have qualified for Medicaid in Virginia. Parents paid premiums, but these will all be credited to them when I file their return. I don't want to file the son's return without mentioning the 1095 because it will bounce out. But if I put it in, would the software refund HIM the premiums as well? I am truly confused how to handle the age 19-26 young adult group. I've previously done two such young clients which I believed I did incorrectly, but they worked well 'nuff to get the refunds released, but I truly don't know what I'm doing.

[Greta]

(Con't).. no unemployment collected in 2021 by parents or son. There is no best-case tax issue involved since the premiums will be fully credited back regardless of who uses Form 8962.

[TaxGuyBill]

Was there any Advance credit paid (column C of the 1095-A)?

[Greta]

Yes, advance credit was paid. But on parents' return it will be fully credited back.

[TaxGuyBill · Accepted solution]

On the son's return, enter the 1095-A and then on the Allocation worksheet of the 1095-A (right under line 33), enter (1) one of the parent's SSN, (2) the start and end months, and (3) zero in each of the allocation fields.

The rules and method would be different if there was no Advance credit (which is why I had to know that first).