Question

1095a ACA question

Forum|Forum|5 years ago
July 9, 2020
1 reply
0 views

Here is the situation of someone whose taxes I’m assisting with:

- parents used ACA (marketplace plan) for the full year

- 22 year old child that is NOT a dependent for the 2019 year was on the same marketplace policy where an advance credit was made

- 22 year old started a job in August where the employer offers affordable insurance but did not take the employers coverage.

what will be a beneficial allocation between the parents and the non dependent child? Would it be more beneficial to allocate 80% of the policy to parents and 20% to child or 95% to 5%. We want to avoid having the child pay back the premium as much as possible. Any thoughts are so welcome because we are spinning our wheels.

VictoriaD75

You can allocate the percentage of the shared policy in any manner chosen, even 100% / 0%, as long as the total between the parties on the policy does not exceed 100%. The advance premium tax credit is all based on income. We cannot determine what the best allocation would be for you. Try different allocation percentages to determine the result most favorable to the taxpayers.

Shared Policy

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

G

greentea16Author

thank you so much for the response! Tried out multiple allocations in the system and it seems like somehow the 80-20 works the best for them (where it doesn’t hurt both the parents and child from a refund perspective)

follow up question though if you don’t mind- since the child was “ineligible” for marketplace credits for 5 months of the year since he had an employer offering insurance but he still received advance credits under the joint policy.. let’s say if the irs comes back and says repay the advance credits for these 5 months to the child because you were ineligible.. would it matter in that case if we allocated 20% of the policy to him versus 0%? If we allocated 0% would he hypothetically have to pay back 0 of the credit he received?

I hope this doesn’t sound confusing and I so very much appreciate your help.

VictoriaD75

It depends. Did the taxpayer notify the marketplace that the dependent was no longer eligible as a result of employment? If so, the premium tax credit received would have been recalculated.

The IRS FAQ in the link below may be helpful in determining your solution. It has information regarding change of status during the year.

Premium Tax Credit

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"