ACA Question but you need to plug in numbers

[Pacun]

MFJ couple both with ITINs made $100,000 and didn't have insurance. They have a U.S. Citizen daughter that they claim on their return and this person had Golden coverage all year.

 

You cannot check line 61 on form 1040.

 

How can you let the government know that the child had insurance if the parents will use option C on the exemptions?

[Jack from Ohio]

Form 8965.  There will be penalty.  Use the worksheet.

[Pacun]

There is no penalty but there is no way to correctly let the IRS know.

[Chowdahead]

Under Part III of the Individual Exemptions did you select both filers and indicate Exemption C for the entire year for both of them?

[easytax]

Under Part III of the Individual Exemptions did you select both filers and indicate Exemption C for the entire year for both of them?

 

Correct, according to an IRS Webinar today.  ITIN's excepted from ACA but in a case such as mentioned here --- they would file 8965 using Code "C" exemption.

[Pacun]

Correct, I did that but my question is about the U.S. Citizen child who had insurance all year and is required to do so. How can I let the IRS that this child is not exempted and that it complied while the parent use Exemption C?

[easytax]

Correct, I did that but my question is about the U.S. Citizen child who had insurance all year and is required to do so. How can I let the IRS that this child is not exempted and that it complied while the parent use Exemption C?

The child is listed on the parents return and there is no requirement for showing they had coverage --- probably deemed "understood"

 

From 8965 instructions:

"If you are unable to check the box on your Form 1040 series return indicating that every member of your tax household had minimum essential coverage in every month of 2014 (and therefore you are filing Form 8965 to report or claim a coverage exemption or are making a shared responsibility payment), you do not need to take any action to indicate that some members of your tax household had minimum essential coverage for some or all months in 2014."

[Pacun]

Thank you.

 

That means that in the case of this couple, they don't need to worry about their U.S. Children having insurance as long as the parents are Exempted.

 

I wonder how in the same 1040, you can have a credit and a penalty entries.

Edited January 22, 2015 by Pacun

[Chowdahead]

Thank you.

 

That means that in the case of this couple, they don't need to worry about their U.S. Children having insurance as long as the parents are Exempted.

 

I wonder how in the same 1040, you can have a credit and a penalty entries.

Well I wouldn't say they don't ave to worry about it.  They just don't need to indicate it on the 1040.  Sounds like It is assumed the child had the required coverage, is they way I read it.

 

But again, what are the chances the IRS is going to go after two ITIN holders for the fine for their U.S. Citizen child not having coverage....

[Terry D EA]

I'm not using ATX but in my program there are dependency questions regarding the insurance in the dependency entry screens including the question as to whether the insurance they had was purchased in the market place. Now what bothers me is I have had two clients with dependents covered under Medicaid for which they had the proof and neither parent had been covered. No penalty because of affordability exemption but it appears the IRS will know by the input. I'm just assuming on this as there is no other evidence available that I can see. Maybe behind the scenes as to what I actually see and what gets filed.

[TAXMAN]

My question might be: How in the world is IRS going to check all this stuff when we have a hard time grasping onto the various situations presented to us. I don't like being the K-9 unit. Just my 2 Cents

[Gail in Virginia]

I feel more like the mine-sweeping unit. *sigh*