My wife's daughter lives with me & my wife (MFJ) and is 18 years old and a senior in high school for 2024. I normally claim her but in 2024 she received a $20,000 SSA surviving child benefit. She also worked part-time and earned $9,000. Should I continue to claim her as a dependent as it would probably be a stretch to prove I provided more than half of her support having made $29,000 in 2024? Also, if I don't claim her, can I also not claim her on my Premium Tax Credit calculation as I included her in my health coverage for 2024?
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When it comes to claiming her, it is not about if you provided more than half of her support, but rather or not she provided more than half of her own support.
If this money all went into savings, then she did not use it to provide more than half of her own support.
If she bought her own clothing, a vehicle, paid her insurance, paid you rent and bought her own food, then no, you probably would not be able to claim her as a dependent because she would have likely provided more than half of her own support.
If you are not claiming her as a dependent on your return and she is filing as a non-dependent, you will both need to enter the 1095-A on each of your returns. After the form is entered you will be asked if this was a shared policy, if it was you will click yes. Then you will be able to allocate an amount to you and your daughter. You can claim 100% or 0%, she can do the same as long as it adds up to 100%. Many times parents paid the premiums and will allocate the full amount to themselves, while the kids just enter the form and allocate 0%.
If you do claim her as a dependent, you will be asked at one point when entering the 1095-A if your dependent had income and then you will be asked to enter her MAGI. This may lead you to have to pay back some or all of the APTC as it could boost your household MAGI up above what your credit was based on.
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