Should I say my dependent's MAGI = $0 during the Affordable Care Act (Form 1095-A) interview question?

Forum|Forum|4 years ago
February 27, 2022
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My dependent college child made Less than $10K earned income and $2 Dividend Income so I dont believe she is required to file Federal taxes except to claim a tax refund.

During the interview for the Affordable Care Act (Form 1095-A) Turbotax asks "What's your child's modified adjusted gross income (MAGI)?"

There is a big difference in the Premium Tax Credit depending how I answer this.

Since she is not required to file Federal taxes (Except fot the refund) Should I answer the question by saying MAGI = 0?

TurboTax Self Employed Online

Best answer by rjs

That is correct. If your daughter is not required to file a tax return, or she files only to get a refund of all the tax that was withheld, you do not include her MAGI in the Affordable Care Act calculation. You can leave the amount blank, or don't check the box that says you have a dependent who is filing a separate tax return.

rjsAnswer

Employee

newusernameagainAuthor

Can you please clarify if I have to report Dependent income on Parent's form 8962 Line 2B if the Dependent earns over $400 in Self Employed Income but still does not meet the Federal Income (single) threshold of $12,550 ? If she earns more than $400 for dog or baby sitting, it's considered Self Employment income and my understanding is she is therefore REQUIRED to file a federal income tax return.

I believe the Turbotax 2021 Help prompt indicated I needed to report dependend income on 8962 Line 2b IF THE DEPENDENT IS REQUIRED TO FILE A FEDERAL INCOME TAX RETURN". In other words, any event that would "trigger" a requirement to file, even if the $12,550 income threshold was not met, would require reporting dependent income on Parents 8962.

Form 8962 Line 2B instructions state (partial quote):

"Enter on line 2b the combined modified AGI for your dedpendents who are required to file an income tax return because their income meets the income tax return filing threshold. Do not include the modified AGI of dependents who are filing a tax return only to claim a refund of tax withheld or estimated taxes"

I cannot get access the turbotax help question anymore to confirm the turbotax question was worded the way I stated since I already filed for 2021 but I am trying to plan for 2022 taxes.

NCPERSON1

yes, if your child received a 1099 and it exceeds $400 there is a filing requirement,

as the income is below $12,550 there is no INCOME tax. But there is a "SELF EMPLOYMENT" tax, which represents the social secruity and medicare taxes that would have been withheld from the child's paycheck had they been a W-2 employee