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Thank you everyone, you've given me enough information to advise the client to take the deduction. In their case the employer was not subsidizing any amount for COBRA. Whew! Glad Judy let me know going crazy for not finding anything was not my fault. Gail, the most official source I found was what Elrod referenced, Pub 535 among other non official sources like Nolo, I was all over the place. Here's the longer version from the Pub. Other coverage: You can’t take the deduction for any month you were eligible to participate in any employer (including your spouse's) subsidized health plan at any time during that month, even if you didn’t actually participate. In addition, if you were eligible for any month or part of a month to participate in any subsidized health plan maintained by the employer of either your dependent or your child who was under age 27 at the end of 2018, don’t use amounts paid for coverage for that month to figure the deduction. I was hoping Elrod could find a graphic of me going crazy, I was in need of a good laugh after not finding anything. Thanks again, Bill

@FDNY, I found cites for you: Sec 35 is the section that covers SEHI, ,and subsection (e) has the list of qualified coverage. The first item listed as allowable for SEHI under Sec35(e)(1)(A) is "Coverage under a COBRA continuation provision (as defined in section 9832(d)(1)). Then, Sec 35(f) "Other Specified Coverage" section talks defines "subsidized coverage". You can read that section, but basically says that subsidized is where at least 50% or more of the cost of coverage is paid or incurred by the employer. Here is a safe link to Cornell Law of that section if you want to print or save the documentation: https://www.law.cornell.edu/uscode/text/26/35

But then you still have the question as to whether twin #2 is considered to be younger than twin #1 by the IRS. As mentioned above, they might be the same age per Rev. Rul. 2003-72, 2003-2 CB 346, 07/19/2003, IRC Sec(s). 21 If they were born before and after midnight you would have a definite answer.

Bills Thanksgiving............. His celebration the day before.... Up early to hunt it down..... Trying to cut it up for friends..... Sharing with his friends when it's time to eat... Thanks Bill.....and Happy Thanksgiving to all of you wonderful tax folks.

Judy, there are so many health insurance issues stuffed into the tax code it is easy to see how someone could get it crossed over. Not for me, I come from a line of cattle ranchers on both sides, I can smell the prime rib already!

Ack! Dan, you are correct. Second time this week with bad code! I surrender. @FDNY, I'm sorry. I deserve no turkey, and certainly no dessert for me!

Judy I think you have some references crossed. Section 35 pertains to HCTC while section 162(l)(1) covers SEHI.

I think I'd print Publication 5334 and tell them, "Sorry, no." Just kidding. Maybe. This is fascinating, and probably not at all what Congress had in mind by allowing a taxpayer to claim a younger sibling for EITC. Which is the always the problem for these things.

Bill, I would believe that the client is eligible to claim SEHI deduction. Publication 535 worksheet says.... Don’t include the following. • Amounts for any month you were eligible to participate in a health plan subsidized by your or your spouse’s employer or the employer of either your dependent or your child who was under the age of 27. Cobra is not an employer subsidized plan. Cobra is paid for by the taxpayer, just as if they went out and bought their own plan. My wife and I had to go on Cobra is the past. I had to contact the insurance co.... Set the plan choice.... And send a check for the premiums. It was not paid/subsidized by Mary's old employer. We paid it. And I took the SEHI deduction. Hope this helps... https://www.irs.gov/forms-pubs/about-publication-535

The twin brother is not younger than the spouse, so no. https://www.irs.gov/pub/irs-pdf/p5334.pdf

HA! No problem, I did well with your help. So turkey for you and thanks to Dan, you're invited too. I better buy a second turkey, might need at least 3 legs and thighs. This is the link https://www.law.cornell.edu/cfr/text/26/1.162(l)-1

Thank you Judy, that was very helpful and so nice of you to make it easy for me. If you were at my house for Thanksgiving dinner I would serve you first and offer you any part of the turkey you want, even though I'll be taking the chance that I may have to fight over the remaining leg and thigh. Happy Thanksgiving!

I don't have an answer but will give you two conflicting points of view. Sorry it may not be much help except to say that there isn't clear guidance, and that is the reason you aren't finding a definitive answer. There are two issues: first, is it continuation and participation in a group plan established in the name of the former employer, and second, is it subsidized. I could certainly be wrong, but I believe COBRA coverage is a continuation of coverage that is considered to be group coverage under the plan established in the name of the former employer. That's going to prelude taking the SEHI deduction for COBRA premiums because it isn't established in the name of the individual or S.E. business. Take a look at the COBRA information found on the DOL site here: https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/faqs/cobra-continuation-health-coverage-consumer.pdf One of the reasons I say it is still continuation of a group plan of the former employer is that the COBRA coverage can end if the former employer ceases to exist, chooses to discontinue offering coverage and terminates the plan, or if the # of employees drops below threshold and employer is no longer required to offer COBRA coverage. Also, in the past I've seen the invoices received by corporate clients with former employees that chose COBRA coverage, and I recall seeing the former employees' names on those invoices but with no premium charge because those were being paid by the employees separate from the company. Also, keep in mind that the employer could choose to pay some or all of COBRA premiums as part of their overall benefit package, and I don't think that would be allowed if the former employees' COBRA premiums were considered a separate individual plan. Again, just my unresearched opinion. _____________________________ With all of ^^ that being said, Lasser says that it's an unclear position. Here's a Q & A from last year that also isn't much help except to say that there's no official guidance on whether or not the COBRA premiums are still considered an employer subsidized plan. Here's the C&P from Lasser's site:

Rita, at first I agreed with you but then had second thoughts. The link you referred to is not consistent with other sources. From pub 501: "Child must be younger than you or your spouse........... However, if you are married filing jointly, the child must be younger than you or your spouse but doesn't have to be younger than both of you." That is also consistent with section 152(c)3(A) and the language in the 2008 Adoption Act which set forth the age restriction. It looks like they can.

I didn't raise prices nearly enough last year, so I'm raising again this year.

That is true, but the point I was making is the case lays out a very detailed analysis of the factors the court looks at in determining a profit motive. There are lots of other factors, and just quitting when it did not work out is not the only thing the court looks at. If just quitting an unprofitable hobby...uh... business activity... was the determining factor, I could go try to be a professional skier for 3 years, then quit and say it did not work out, and get 3 years of snow skiing deducted. Tom Modesto, CA

I am gone until about the 5th of December, but it always seems to be ready when I get back.

We routinely delete all rolled over letters and re-add them. But first we customize the current year's letters, which is a pain because it's hard to see all of the parts of the letters. Also, we never install until January because early versions are loaded with bugs.