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Allocation of Policy Amounts on 8962

dhoyt
Level 4

Hi all. I'm just looking for confirmation or comment on how I can handle an allocation of policy amounts on an 8962.

Taxpayer had a policy through the marketplace that covererd her, her dependent son, and a non-dependent son. We need to alocate the amounts on the 1095A between Taypayer and her non-dependent son. The Instructions say that if they agree, they can choose to allocate the policy however they want. Of course, it is way better for the son to take the policy 100% on his return since his income is significantly lower. I just want some confirmation from other professionals that there is nothing wrong with doing that. I've done it before but it always feels too good to be true. I've even found old posts that say that it is fine to do it this way. But it feels like a loophole that should have been closed by now.

Any comment is appreciated. Thanks

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1 Best Answer

Accepted Solutions
Just-Lisa-Now-
Level 15
Level 15
I agree, it feels like a loophole that should have been closed, but it hasn't! I've saved parents thousands of dollars of PTC payback doing it like that, allocating 100% to the non-dep kid.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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4 Comments 4
Just-Lisa-Now-
Level 15
Level 15
I agree, it feels like a loophole that should have been closed, but it hasn't! I've saved parents thousands of dollars of PTC payback doing it like that, allocating 100% to the non-dep kid.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
Jim-from-Ohio
Level 11
Level 11

I run across this once in a while..In regards to allocating all the figures to the non-dependent child,what if they live in the same house as the higher income parents?  I thought household income came into play. 

Terry53029
Level 15
Level 15

@Jim-from-Ohio It only works if someone is on policy, but is not on same tax return, and not being claimed as a dependent

dhoyt
Level 4

@Jim-from-Ohio I believe the need to include the income in the calculation of PTC only applies to spouse and dependents, which make up the "tax family" for PTC purposes. In this case, an adult child who lives in the house but does not qualify as a depedent does not count as part of the tax family.