Patrick Michael Posted February 19, 2016 Report Share Posted February 19, 2016 Client was working part time while going to school, had no insurance from January to October. He was married in October and went on his new wife's health insurance as of 11/1 (wife had insurance for the whole year). Client would have been eligible for exemption based on affordability based on his income only, but when combined with his new wife's income he losses the exemption. Is there any exceptions to deal with this situation or are they stuck with paying the shared responsibility payment. Thanks. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 19, 2016 Report Share Posted February 19, 2016 He/they are responsible for the penalty. No exception. He would have been responsible if he had not been married. Marriage does not grant any exception to the requirement rules.. Quote Link to comment Share on other sites More sharing options...
Catherine Posted February 19, 2016 Report Share Posted February 19, 2016 Not sure if I agree with Jack that there is no exception. This is one oddball case where filing MFS might help. 1 Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 19, 2016 Report Share Posted February 19, 2016 10 minutes ago, Catherine said: Not sure if I agree with Jack that there is no exception. This is one oddball case where filing MFS might help. Can't file separately if they received subsidy. Quote Link to comment Share on other sites More sharing options...
jklcpa Posted February 19, 2016 Report Share Posted February 19, 2016 4 minutes ago, Jack from Ohio said: Can't file separately if they received subsidy. True, but subsidy wasn't mentioned, only the SRP. In these cases, it's best to test both filing statuses. Quote Link to comment Share on other sites More sharing options...
Patrick Michael Posted February 20, 2016 Author Report Share Posted February 20, 2016 20 hours ago, Catherine said: Not sure if I agree with Jack that there is no exception. This is one oddball case where filing MFS might help. Can't file separately as he would loss the education credit which is more than the shared responsibility payment. On 2/19/2016 at 8:03 AM, Jack from Ohio said: He/they are responsible for the penalty. No exception. He would have been responsible if he had not been married. Marriage does not grant any exception to the requirement rules.. He would not have had any shared responsibility payment if he could use his income only for the affordability calculation during the time period he was single. I was hoping for some type of alternative calculations in this case. I couldn't find any while researching it and was hoping someone here might have something. Oh well, guess it's time to give them the bad news. Quote Link to comment Share on other sites More sharing options...
joanmcq Posted March 3, 2016 Report Share Posted March 3, 2016 There's a pretty steep marriage penalty to the married during the year calculations. Splits the total years income in half, so when you have a situation like this, it makes no sense. I had a couple postpone their marriage to 2016 to avoid the repayment! Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted March 3, 2016 Report Share Posted March 3, 2016 Bad laws make for bad outcomes. They are stuck with this one. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted March 3, 2016 Report Share Posted March 3, 2016 4 minutes ago, kcjenkins said: Bad laws make for bad outcomes. They are stuck with this one. All laws will have unintended consequences for a minority. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted March 3, 2016 Report Share Posted March 3, 2016 I thought this was a month by month calculation so people weren't penalized through no fault of their own? Quote Link to comment Share on other sites More sharing options...
jklcpa Posted March 3, 2016 Report Share Posted March 3, 2016 1 hour ago, Abby Normal said: I thought this was a month by month calculation so people weren't penalized through no fault of their own? There are month-by-month alternative calcs for the year of marriage to determine the repayment of APTC that may yield a better result, but none to help minimize the SRP. The only remaining option is testing whether MFS is better than MFJ, and the OP already said that MFS causes a larger decrease in education credits than the reduction in the SRP, so that filing status is of no value in assessing the overall tax effect. Quote Link to comment Share on other sites More sharing options...
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