Dad got Marketplace insurance for grown kiddo

[Possi]

Back in the office after spending a couple of weeks with my new grandson, and right off the bat, the wonderful Marketplace is in my eye.

 

Dad got Marketplace insurance for himself and his 21 yr old not-a-student, and working-full-time-son.

 

Dad was umemployed when he got the insurance, and he included son as a household member needing insurance. I can't say whether or not he included Son's income as household income, but I can say that Marketplace paid 90% of the premiums. 

 

Now, son's mother did his tax return, and got a letter saying they need the 1095A. Mom and Dad are divorced, and she is asking for his (Dad, my client's) 1095A.

 

I think if I was doing son's return, I would have said he had insurance, not through the marketplace. After all, kiddo didn't get it through the marketplace, DAD did. Then, the 1095A would not affect the son's return.

 

How is this handled? All tax season, I never had this happen on any of my returns.

 

My client, Dad, eventually found employment (1099 income) and I'm sure he will be paying back some, of not all, of those premiums.

 

Since his premiums are for him and his son, and he is not claiming his son, can I allocate the premiums on the 8962 between him and his son? I don't see how I can do that, since son is not on Dad's tax return.

 

Has anyone had this problem?

 

[Tax Prep by Deb]

Yes,

You have to do a policy allocation.  They can agree on the percent, if they can't agree on the percent then it is 50%.  The instructions for form 8962 has an example that will assist you in reporting the 1095A correctly for the dad, and I would make a copy and give it to the Son so that his taxes can be completed.  IRS does require each to reconcile the credit.  There is actually nothing wrong with dad getting insurance with son thru exchange, but now comes the reconciling of everything and depending on the outcomes possible having to pay back some of the subsidy.

[Possi]

On ‎5‎/‎8‎/‎2017 at 4:53 PM, Tax Prep by Deb said:

Yes,

You have to do a policy allocation.  They can agree on the percent, if they can't agree on the percent then it is 50%.  The instructions for form 8962 has an example that will assist you in reporting the 1095A correctly for the dad, and I would make a copy and give it to the Son so that his taxes can be completed.  IRS does require each to reconcile the credit.  There is actually nothing wrong with dad getting insurance with son thru exchange, but now comes the reconciling of everything and depending on the outcomes possible having to pay back some of the subsidy.

Thanks! I'll go to those instructions, like I should have before I posted, and get this done. This "after tax season" work is so hard when there's a new grandson waiting for his MiMi to get back. It's so hard to focus. He was born in March, so this whole season was hard for me. I know, no excuses, but thanks for helping me!  =)

[Catherine]

2 hours ago, Possi said:

no excuses

Whyever not!?!?  Brand new grandsons are FAR more important than people who make stupid tax mistakes and then expect you to pull a hat out of a rabbit (any half-rate magician can pull a rabbit out of a hat; we're at a higher level, I guess.  That baby is not going to have those precious toothless grins for too long - go enjoy him!

[Jack from Ohio]

Grandchild trumps ALL!!