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Pacun

Help with splitting Advance payments

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I know this has been discussed before so you have a link to previous, I will appreciate it your pointing me to the right direction.

Parents and two children (19 and 22) got advanced payments from the exchange.

Children didn't go to school full time and the 22 years old made $3,400 and the other $9,000. So all of them were under the same exchange plan and now parents have to return about 3K since they are only two on the return. How do I allocate some of the advances to the children?

 

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The Tax Book says:  "The allocation percentage can be any amount between zero and 100% that is agreed upon by each taxpayer. If the taxpayers do not agree on an allocation percentage, then the allocation percentage is equal to the number of enrollees claimed as a personal exemption divided by the total number of individuals enrolled in the qualified health plan."

Hope this helps.

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So, if I give 98% to the boy who earned only 3,400, and 1 percent to the joint return and 1 percent to the other filer, I think they will not have to return anything.

But, I want to do it 25% to each person so, what do I do on each  of the three returns?

I wish that I didn't get this return this late, because I don't feel like researching the best way of doing it.

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On ‎4‎/‎14‎/‎2017 at 7:05 PM, Catherine said:

The Tax Book says:  "The allocation percentage can be any amount between zero and 100% that is agreed upon by each taxpayer.

Inclusive?  Can it be zero and 100?   I have a mom and a kid sharing a policy.  Kid not a dependent.  Parents are over 400% of poverty level as early retirees.  There is no IRA happening.  And what about the program screaming at me to discard the 8962 for the parents since they are over 400% on line 5?  Is the absence of 8962 gonna make my life [even more] miserable [because of this law] in a couple months when IRS sends letter to parents?

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17 minutes ago, RitaB said:

Inclusive?  Can it be zero and 100?   I have a mom and a kid sharing a policy.  Kid not a dependent.  Parents are over 400% of poverty level as early retirees.  There is no IRA happening.  And what about the program screaming at me to discard the 8962 for the parents since they are over 400% on line 5?  Is the absence of 8962 gonna make my life [even more] miserable [because of this law] in a couple months when IRS sends letter to parents?

 

Yes, it can be 0 and 100.  So the kid is not part of the "tax family" and therefore the mom may choose to allocate all, some or none of each month's figures from the 1095-A.  Because they are over the 400% FPV, they aren't an applicable taxpayer for the PTC (obviously) and will have the repayment, not capped.  In that case, why not allocate 100% of all amounts to the kid?

Does checking the box on line 9 of the parents 8962 make your computer stop screaming?

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22 hours ago, jklcpa said:

 

Yes, it can be 0 and 100.  So the kid is not part of the "tax family" and therefore the mom may choose to allocate all, some or none of each month's figures from the 1095-A.  Because they are over the 400% FPV, they aren't an applicable taxpayer for the PTC (obviously) and will have the repayment, not capped.  In that case, why not allocate 100% of all amounts to the kid?

Does checking the box on line 9 of the parents 8962 make your computer stop screaming?

I see from the Instructions for Form 8962 that 0% and 100% are allowed.  TheTaxbook should not use the word “between” as that means greater than zero and less than 100.  Or at least I think it did in the 90s when I was whacking Algebra students’ knuckles over things like that. I wish I could find an example of my situation; I would feel better. I realize loopholes are unfair by definition, but I feel like this is a terrible disservice to my other clients who projected their income accurately and thus did not qualify for APTC. 

I’m not at work, but I’m sure I had the Box on Line 9 checked. On the other hand, and in the words of a great orator: Tax season has fried me good and proper. 

If I can’t get ATX to create the e-file, I think it might be best to paper file parent's return. Does Drake allow the Form 8962 if Line 5 exceeds 400%? 

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I don't have a return currently that I could test on and haven't had your situation to deal with. The programs have to allow the form to be filed when it exceeds the 400% because it's required to file if they get a 1095A and that's the only way you can calculate and report the payback.

 

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On ‎4‎/‎7‎/‎2018 at 6:32 PM, RitaB said:

Inclusive?  Can it be zero and 100?   I have a mom and a kid sharing a policy.  Kid not a dependent.  Parents are over 400% of poverty level as early retirees.  There is no IRA happening.  And what about the program screaming at me to discard the 8962 for the parents since they are over 400% on line 5?  Is the absence of 8962 gonna make my life [even more] miserable [because of this law] in a couple months when IRS sends letter to parents?

 

On ‎4‎/‎8‎/‎2018 at 5:25 PM, RitaB said:

I see from the Instructions for Form 8962 that 0% and 100% are allowed...If I can’t get ATX to create the e-file, I think it might be best to paper file parent's return. Does Drake allow the Form 8962 if Line 5 exceeds 400%? 

 

On ‎4‎/‎8‎/‎2018 at 6:50 PM, jklcpa said:

I don't have a return currently that I could test on and haven't had your situation to deal with. The programs have to allow the form to be filed when it exceeds the 400% because it's required to file if they get a 1095A and that's the only way you can calculate and report the payback.

 

Ok, I think I've managed to get these folks' returns done and will be able to e-file both.  I hope this post will help someone down the road, because this is the most frustrated I've ever felt reading directions in my entire illustrious career.  I had to keep telling myself there is a solution, keep going.

I had to allocate something more than 0% in the parents' Form 8962, lines 12 - 23, column f, because ATX does not recognize zero as a number.   (Not sure if that's ATX's fault, but zero is a number.)  So I allocated 1% of APTC to parents and 99% to kid. The other columns on 12 - 23 on the parents' form are blank because their MAGI exceeds four times the poverty level. 

It took me a very long while to figure out that on line 30, e, f, and g are the allocations for the return you are working on, NOT the allocations for the return of the person whose SSN you just entered in 30 b.  I stumbled onto that one because of the Joe and Alice example on page 18 of the instructions for Form 8962.  I don't know how else I would have known that because ATX does not use the percentages; you have to manually figure your numbers for 12 - 23.

This loophole seems too bad to be true, and the taxpayers paid BlueCross and BlueShield of TN $17,000 for these folks' policy that we would not have if my clients had known that the kid was no longer a dependent.  It is a great consolation to me to know that these people are just oblivious - they were not trying to game the system, and didn't even use the insurance.  They only signed up for it because they were terrified of the SRP. 

On second thought, that may be exactly why they are allowed to allocate as they wish.  Maybe the lawmakers knew mistakes would be made in applying for the subsidy.  H*ll if I know, but I have never felt more like Loophole Lefty, and I'd just as soon not.

 

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12 minutes ago, RitaB said:

 

 

... my entire illustrious career.   ( /s)

...Maybe the lawmakers knew mistakes would be made in applying for the subsidy.  H*ll if I know, but I have never felt more like Loophole Lefty,

    and I'd just as soon not.  (not /s)

 

 

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