Newly independent federally but still dependent on state insurance

[Crystaley]

Filing for 2020: Independent federally since I'm too old and now make too much to qualify as a relative, but still dependent on my mother's Covered California insurance since I was 25 for most of the year until September. We had this insurance from Feb 1 to Dec 31.

On the State Taxes portion, I'm split between two options for "Did you have health insurance coverage in 2020?"

1) If I select "all year," enter the Covered California 3895 info, check "shared policy with another tax payer who's not on my taxes"... This message comes up:
"What percentage of the following policy amounts do you want to claim on your tax return?"
Do I enter 0% for all three premiums/advances? Or 50%? I don't care to claim anything, but I don't want to mess my mother up when she files...

2) If I select "I'll pick which months I had it" and check every month besides January, another uncertain question appears:

"Did you have a situation that waives the tax penalty for being uninsured?" (I guess because I wasn't insured in January.)

Do I select none? I'm dependent for insurance, so would any of it even apply to me? I was unemployed then, but I'm not sure if that matters...
When I select none I get "Based on your situation, the penalty has been waived!"
I'm just not sure if this is right for me either...
Also, there's no mention of which insurance I have or 3895s and such.

Should only my mother take the first option to fill out the 3895 portion when she files? Is "I had it all year" a lie, even though the 3895 has you select which dates you had insurance?

The wording on all this is up for interpretation, and I'm at an awkward position as far as dependence this year, so I'd deeply appreciate some guidance!

[ColeenD3 · Accepted solution]

Check with your parent to see the percentage she claimed. Most of the time they do claim the entire 100%. If she claimed 50%, then you would need to do so as well.

One of the coverage exemptions is "short coverage gap" which is less than three months. The program is recognizing that and you do get the exemption.

[Crystaley]

Okay, so if I select 1), I'll put 0% and leave her to claim 100% when she files...

But, is it better that I select option 2) and skip anything about the 3895 form? The form I was using to fill it in is my mother's, so is it best I don't use it since I'm her dependent anyway? I won't be getting my own 3895 from Covered California.

Also, just to clarify, if I do select option 2), are you saying I'm exempt from a penalty since I was without insurance for less than 3 months?

Thank you for the swift assistance! I just want to get this right.

[ColeenD3]

 You qualify for the exemption for CA.

Exemptions processed by FTB and Covered California

Exemptions Claimed on State Tax Return

• Income is below the tax filing threshold
• Health coverage is considered unaffordable (exceeded 8.24% of household income for the 2020 taxable year)
• Families’ self-only coverage combined cost is unaffordable
• Short coverage gap of 3 consecutive months or less
• Certain non-citizens who are not lawfully present
• Certain citizens living abroad/residents of another state or U.S. territory
• Members of health care sharing ministry
• Members of federally-recognized Indian tribes including Alaskan Natives
• Incarceration (other than incarceration pending the disposition of charges)
• Enrolled in limited or restricted-scope Medi-Cal or other coverage from the California Department of Health Care Services

See this LINK for more information.

[Crystaley]

Thank you so much, Coleen!

So, I will go through with selecting option 2) for exemption. I feel much better about it now, thank you again for the help and link!

If I may ask, when my mother files, is it acceptable that she selects "I had coverage the whole year" to enter our 3895 information? Would that be considered a lie since it didn't begin till February, or does that not matter either since it's less than 3 months?

I'll be helping her file this year because my grandmother can't quite do it anymore. Most of TurboTax does a great job explaining and making it simple, it's just this one section that I can't help but overthink on.

[ColeenD3]

It is best to be consistent. If you put that you are entitled to the exemption, your mother should say the same thing.

[Crystaley]

Understood, I'll follow your advice. Thank you for all the help! You've really eased my mind. 🙂

[Crystaley]

Having gotten to filing today, I feel completely silly now about this entire question!

After selecting option 2) and confirming exempt, I forgot that TurboTax has you review everything once you're done with a section! So I filled out 1) for 0% subsidies, too.

Anyway, I'm still glad I asked here. This is a greatly helpful and responsive community, and I learned a few things to consider.

Thank you again!