Marketplace Tax Credit Filing

[nonfictionlife]

I have four children from two different woman and I use the marketplace for insurance. How should they file their taxes if they are claiming the children, so it won't negatively impact their taxes? What should I put on my taxes so none of us get rejected?

[DawnC]

If all 4 children are on the same 1095-A - All 3 of you will enter that 1095-A on your returns.   And you will all indicate that you have a shared policy.   

For Columns A and Column C - those can be divided how you all agree.  If the policy is you + the 4 kids, you could divide A & C for example - You take 20% and the 2 moms take 40% each.   You can split it however it works out best for your family; your percentages must total 100%.   

But for column B, you will all need to use the tax tool at the Marketplace to get the values for each of your returns.  

[nonfictionlife]

Thank you for the great response. What if they don't any percentage and I take the 100%, would take negatively effect their returns? My fear is that they are going to lose their return when they weren't the ones that purchased insurance through the marketplace.

[CatinaT1]

Yes, you can allocate 100% to yourself. They would still need to report the 1095-A, but show 0% is allocated to them.

[nonfictionlife]

If I allocate 100% to them and they make over the $69,000 threshold. Would they have to pay for the credit I received?

[DaveF1006]

If you allocate 100% of the Marketplace Premium Tax Credit to someone whose income exceeds the $69,000 threshold, they may need to repay part or all of the credit when filing taxes. The repayment amount depends on their actual income and the thresholds set by the IRS for premium tax credit eligibility. If their income is significantly higher than the threshold, they could face a repayment obligation for the credit they received.

It's essential to carefully consider income projections and thresholds when allocating the tax credit to avoid unexpected repayment issues