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Health Insurance Marketplace - parents and dependent on it


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Parents have the health insurance marketplace, they are listed as insured as well as their college daughter.  Last year the daughter's refund was delayed because she received a letter from the IRS stating that she needs to claim form 8962 from the 1095A, so we filled out the form 8962 for daughter, she got her money.  This year I am not sure what I should do now, should I include form 8962 on daughter? I  have never "allocated" and not sure how to go about it... 

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2 hours ago, Pacun said:

Ask them and split it 50/50 and use half of the amounts on the parents and the other half on the daughter's return.

I disagree. If the daughter is a dependent and is included in the parents insurance in the market place, the allocation is to determine who gets the premium tax credit and who pays back the excess. I had this same scenario last year. I allocated everything to the parents and zero to the dependent child. So, on the parents 8962 allocate 0 and the dependent child allocate all to the parents and yo should be fine.

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6 minutes ago, Terry D said:

I disagree. If the daughter is a dependent and is included in the parents insurance in the market place, the allocation is to determine who gets the premium tax credit and who pays back the excess. I had this same scenario last year. I allocated everything to the parents and zero to the dependent child. So, on the parents 8962 allocate 0 and the dependent child allocate all to the parents and yo should be fine.

The moment the poster says that the refund was held by the IRS last year, it means that the daughter is not a dependent. 

You don't allocate anything to your dependents and "I allocated everything..." sounds like you didn't give them a chance to come into agreement how they wanted to share it. 

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Again, I totally disagree. I did indeed have the parents permission to allocate the way I did. I did not state that which is why you took it that way. In my case the dependent got the letter and not the parents and the letter did not indicate his was not a dependent. I don't see how getting the letter automatically removes the dependency as you state.

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23 hours ago, giogis245 said:

Parents have the health insurance marketplace, they are listed as insured as well as their college daughter.  Last year the daughter's refund was delayed because she received a letter from the IRS stating that she needs to claim form 8962 from the 1095A, so we filled out the form 8962 for daughter, she got her money.  This year I am not sure what I should do now, should I include form 8962 on daughter? I  have never "allocated" and not sure how to go about it... 

Was the daughter filing her own return or was she a dependent?

I have never split it with a dependent... you only have to add their income to see if the parents and dependents pass the 400% limitation or how much they must send back or get a refund.

I have about 4 returns that two of the dependents making about 900 each and they file to get a refund of the withholding and I have NEVER received any letters for the dependents.

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  • 4 weeks later...

I don't split anything nor do I make any decisions. It is up to the taxpayer and their dependent who gets what. I don't have time to list where this is in the Pubs but I do know you are only listing what both parties agreed on. You are affecting each persons refund or balance due by the percentage(s) each party agrees on. Sorry I can't explain it any better right now.

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If they were truly a dependent, and they checked the box on the 1040, they should not need to file Form 8962:

https://www.irs.gov/instructions/i8962#idm140230412085312

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TIP:  If you are claimed as a dependent on another person's tax return, the person who claims you will file Form 8962 to take the PTC and, if necessary, repay excess APTC for your coverage. You do not need to file Form 8962.

 

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  • 1 month later...
On 2/15/2021 at 9:52 PM, Pacun said:

The moment the poster says that the refund was held by the IRS last year, it means that the daughter is not a dependent. 

 

Yes, if IRS was looking for Form 8962 on the daughter, she indicated that no one could claim her as a dependent.  Kids.  Sigh.

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