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Jack from Ohio

Non-dependent child claimed by parents for Marketplace subsidy

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Married couple.  Dad is sole provider.  3 children, all live with them.  Ages 18, 20, & 23.  AGI $69K.  Two youngest were claimed as dependents for 2017. 

Oldest was not a student, and earned $47K, hence the reason for not claiming him as dependent. He prepared his own return. (TT)  He has insurance provided by his employer, and received Form 1095-C.  Now here is where the problem starts.

Mom signed up for insurance through the marketplace, and put all three children on as dependents. (she said she thought she took the oldest off) They received $821/mo. subsidy for the whole year for a total subsidy of $9,852.

Oldest son (not a dependent on the parent's return) receives a notice asking for Forms 8962, & 1095-A which does not apply to him, or pay back the entire amount of the subsidy.  

I am at a loss as how to proceed on this problem.  Both taxpayers marked line 62 as having coverage for all year.

Any help would be appreciated.

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You will have to do a policy allocation that he and mom can agree on the % and then he will have to pay back his portion of the allocated subsidy because he is insured through his employer.  You will have to refigure moms and have to decide if you will have to amend.  Not an easy thing to do.  I have had this for the last two years.

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Maybe you can allocate 0 to son and 100% to parents, if not, allocate 99% to parents and 1% to son.

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