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Health Care (form 1095-A) Totally Confused


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Client and son came to me this year for 2019 taxes. Client listed his son with the health care market place. His son began working sometime in 2019 and his income was too high to be claimed as a dependent on his tax return. I did include form 1095-A on the client's return. No dependents were claimed on the return. The premium tax credit was calculated correctly with the amount of the over payment listed on Sch 2 of form 1040 and line 12b form 1040.

Now the plot thickens. I prepared the son's return. Son claimed himself and his employer provides the health care. So far no problem. I filed these returns in July both accepted. Son's refund still has not been received and his return status is still being processed. Son now gets a letter from the IRS asking for his form 1095-A. He never purchased insurance through the market place but as I mentioned above, he was covered on his dad's market place insurance for a part of the year and the remaining time by his employer. 

I will see the letter from the IRS tomorrow, but I am totally confused with what to do with this.

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If the son had insurance through the marketplace, even though the policy was in his dad's name, then when he filed and claimed himself he needed to report that 1095A on his tax return.  The insurance can be allocated anyway that is agreeable to both the son and the father, so you can complete the son's return showing an allocation of 0% since the father's return already shows 100%.  At least that is how it worked for me on the one of these I had a few years ago.

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  • 2 weeks later...

Gail,

Thanks for the reply. It makes perfect sense to allocate as you stated. Finally after three days of trying and being placed on hold, I got in touch with an IRS agent on the PPL who was very helpful. He was on the verge of explaining the percentage calculations when the line went dead again. I assume it was the IRS hanging up when 7:00 PM hit. The guy was trying hard to hear me but then that was it. So, I have filled out the requested 8962's and faxed everything just like they said. Now the waiting game again. Hopefully it won't take too long to get this young man's money.

 

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