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I think I screwed this one up - Dependent no longer


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Long time client works for a school district.  Single 2 children.   Both went to college and stayed home.   No issues.   Client gets sick in 2017.   We got 2017 done, but she was clearly not well when we did the return.   In 2019, we contacted her for the 2018 tax info and found she was still sick.   Never got 2018 done.   Her oldest daughter  calls to make an appointment to do her taxes.   Needs 2018 and 2019 done as she started working.  Do the interview and child says she dropped down from full time to part time student.   OK, not a dependent.   She confirms with mother that mom will not claim her when she does the 2018 return.  Ask about insurance and she says (and mother confirms) that she is on her policy.   This is consistent, as I had seen the 1095 from the school district every year with both children on the policy.   We file the 2018 and 2019 returns for the child.   Mom calls next and says she wants to get 2018 and 2019 caught up.   Comes in for the interview and does not have the 1095 for the insurance.   Tells me she was on Covered CA for 2018!   Got the PTC for the insurance.   Child who is no longer a dependent in 2018 is on the Covered CA policy.   I am waiting for the 1095 from Covered CA, but I have a problem now.  

I think I need to do the allocation of the 2018 PTC and amend the daughters return?   Mom is only entitled to younger sibling as a dependent, but got the PTC for both.

How do I fix this?

2019 is not an issue, since the mother is back on her school district insurance policy.


Modesto, CA

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She may not be a dependent, but for private insurance -- yeah, I know, the marketplace doesn't have to play by the same rules -- kids can stay on parents' policies, even though no longer dependents, until under 27 or some age like that. I have seen APTC on Forms 1095 as  "household" members, but grown child files own return (or ex-spouse). You do have to allocate. But, it can be any allocation that works for your clients.

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