Last year we claimed married and joint. We are now divorced. I have completed FAFSA claiming 18 year old who will be starting college in fall. He has insurance on the same child through the Affordable Care Act. We are concerned that we can't have it both ways. How do we figure out which is the most advantageous?
The issue relates to who is the custodial parent and the parent that has "legal" custody. The Affordable Care Act requires plans and issuers that offer dependent child coverage to make the coverage available until a child reaches the age of 26. Both married and unmarried children qualify for this coverage. This rule applies to all plans in the individual market and to all employer plans.
The ACA coverage would be based on the divorce degree and who has the legal responsibility, if any, to provide insurance.
If parents are separated or divorced, the custodial parent is responsible for filling out the Free Application for Federal Student Aid (FAFSA). The custodial parent for federal student aid purposes is the parent with whom child lived the most during the past 12 months. (The twelve month period is the twelve month period ending on the FAFSA application date, not the previous calendar year.) Note that this is not necessarily the same as the parent who has legal custody. If you did not live with one parent more than the other, the parent who provided you with the most financial support during the past twelve months should fill out the FAFSA. This is probably the parent who claimed you as a dependent on their tax return. If you have not received any support from either parent during the past 12 months, use the most recent calendar year for which you received some support from a parent. These rules are based on section 475(f)(1) of the Higher Education Act of 1965 (20 USC 1087oo(f)(1)).
I am the ex referred to. So we have been divorced since June. We have joint custody of the 18 year old. I am providing Insurance through the Affordable care act. But the ex has been filling out FAFSA on her income. Your answer did not clear it up if one can claim 18 year old for ACA and get discount on them and my ex can clam on taxes and FAFSA?