Can form 8962 Allocation Policy-Situation 4 apply for a non-dependent child to remain on subsidized family plan even if child alone has access to workplace healthcare?

[deeMatrix]

I have seen in looking at the Turbotax forum cases where a non-dependent child still gets covered under the same subsidized marketplace exchange plan as the rest of family but since a non-dependent is in separate tax household. Upon filing taxes the 1095-A form policy premium, advanced premium subsidy, etc. is distributed between the two household/tax groups on form 8962 via the use of the Allocation of Policy Amounts - Situation 4 where a policy is shared between two tax families. 

As long as one of the two tax groups is eligible for premium tax credits then they can apply 100% of the allocation to that group and 0% to the second group. This would allow the child to still be on the same marketplace exchange plan as rest of family. Not sure if this would apply if non-dependent child is not eligible for PTC since affordable, workplace coverage is made available?

[TaxGuyBill · Accepted solution]

Yes, it would still apply.

However, a couple of 'warnings'"

• If you are currently applying for Marketplace insurance, you are required to tell the Marketplace the child is a non-dependent.  They will then send two separate 1095-As, one for each family.
• If you are filing your tax return, the SLCSP (column B of the 1095-A) needs to be changed because the child is eligible for employer insurance.  You can look it up here:https://www.healthcare.gov/tax-tool/
  

[deeMatrix]

Thanks, already filled out 2018 application and just found out so I should update application with non-dependent now that child got a job.  As for point 2, if child is a dependent this year then change SLSCP column B when filling out 2017 taxes for only the months the child is eligible for employer insurance?

[TaxGuyBill]

Yes, you only change it for the months he is eligible for employer insurance.

[TaxGuyBill]

Also, if he is eligible for employer insurance, it MIGHT be better for him to have that employer insurance, rather than being on a Marketplace plan.  Employer insurance is pre-tax (which saves money) and usually has a better 'network' of medical facilities.

[deeMatrix]

I apologize for the additional questions, so I need to wait until next year to get 2017 Premium Tax Credit tool?  Also, the change in column B SLSCP for only the months the child is eligible for employer insurance will only reduce the subsidy for the child and not the other eligible subsidized family members?

[TaxGuyBill]

If you are preparing your 2016 tax return, you use the 2016 lookup tool.

It reduces the overall credit, regardless of how it is allocated.  So it WILL affect any credit on the other family members' tax return.