1095-A

[sadkerson]

In all my years, I have never ran into this.

My clients got married in November 2022.  They are filing MFJ.  Husband is 21, still covered under parents insurance.  Wife is 20 and has a 1095-A.  

I cannot find a place in Proseries to mark that shows he has insurance.  Therefore, it is calculating his income as part of the household income for the entire year and therefore they will owe back the entire subsidy.

Have you all processed one like this before?  If so, please help.

Thanks in advance

[Just-Lisa-Now-]

Theres supposed to be some kind of alternative calculation for the year of marriage, @TaxGuyBill might be able to help, Ive never had this situation so Ive never had to dig into it

[TaxGuyBill · Accepted solution]

Unfortunately, the Premium Tax Credit is NOT based on the income of those who have it.  It is based on the Household Income, regardless of other people are covered by other insurance or Marketplace insurance.  So you can't exclude his income from the calculation, unless they file as MFS.

As Lisa said, there is an "alternative" method of calculating things for the year of marriage (see the box right above line 9 of the 8962).  Although it does reduce the repayment in some circumstances, unfortunately other times it does not reduce it.

You should test the results of MFS.  That MIGHT limit the repayment, but it could possibly increase the tax on other parts of the tax return.  If they are interested in contributing to a deductible Traditional IRA, that may also reduce the repayment of the Advance Credit.

[rcooley25]

There is no reason for you to mark if he has insurance or not. Unless his insurance was bought on the exchange there is nothing you have to do. The requirement that we had to mark whether someone had insurance or not was eliminated sometime ago.

[rcooley25]

 I made a mistake. What you are talking about was bought on the exchange.

[sadkerson]

Thank you!  Yes, MFS is their best option at this point.  I'll look into the traditional IRA.