1095A issue with dependent child getting own insurance mid year

[cbuck9903]

I am confused on how to handle my dependent child that started a job in July 2022 and got her own health Insurance at that time. She lived with us the entire year.  I am self-employed filing as an Scorp and our family had health insurance through the marketplace.  My daughter was on our insurance from Jan to June and the 1095A we received shows the correct amounts for Jan to June with her on it and Jul to December without her.  I have also done the SLCSP correctly for the same breakdown.  My issue is that from Jan to June when my daughter was on our policy she had around $5,000 of income which wouldn’t need to be added to my household income since it falls below the standard deduction.  But from July to December she made around $32,000. 

How do I file this correctly to not increase my household income for the year since she didn’t have much income when she was on our policy? Adding her full year income would significantly increase Household Income as a percentage of the poverty line and reduce my tax refund. 

[MarilynG1]

First, did you claim your health insurance premiums as a Self-Employed Health Insurance expense? 

However, it sounds as if your daughter will file her own return with 37K income (unless she is a student) and is not a dependent on your return.  In that case, when entering your 1099-A, indicate that 'you shared this policy with someone not on your return' and Allocate a % the premium amounts between your family and her.  

If this does not apply and she qualifies as your dependent, the Form 8962 calculations use 'total annual household income', so the fact that she earned less in the first part of the year would not be a factor. 

Here's more info on How is the Premium Tax Credit Calculated?

@cbuck9903 

[cbuck9903]

In regards to the self-employed health insurance expense, I entered all the information under the affordable care act section in TurboTax deductions.  Since I have the Scorp election the premiums are included in my W2 wages and there is no schedule C for the business.  When I go to the section business deductions and credits it states the following “Do not include health insurance purchased through a Health Insurance Marketplace (also known as an exchange). These premiums are entered on Form 1095-A in the program.”  When the credits for the 1095a are calculated I don’t end up paying anything for the medical premiums, I am getting it all back as a refund since I didn’t take any advance premium tax credits.  Should I be including something in business deductions and credits self-employed health insurance paid?

I am little confused on how to do the shared policy allocation.

On my tax return, I entered all the information from the 1095A for the entire year and the same for the SLCSP amounts.  Then I indicated I shared the policy with someone not on my return, entered their ssn, selected allocation start and stop as January to June, selected 100% for Premium Percentage and 100% for SLCSP Percentage and it seems to show the correct refund.

For my daughters return, do I enter the same 1095A amounts and SLCSP premiums for the entire year or just for January to June when she was on the policy.  Then if I put the amounts for the whole year do I select Shared policy and put my ssn and select January to December and enter 0% for the allocations.  And if I enter 1095A amounts for just January to June do I select January to June for the allocations and enter 0%

Where I am confused is that doing the steps above seem to get the correct refunds but they don’t take into account any of my daughters income for the year.  Is that the way it should work?

Thanks for your assistance

[AliciaP1]

The steps you have listed you are taking are correct.  Your concern about your daughter's income though is just that you need to enter her full income on her return based on how it was reported.  So, if she received a W2 (or 2) enter those in the Wages & Income section of her return.  Or if she received a 1099-NEC as a contract employee, enter that form in the Wages & Income section of her return.

@cbuck9903