Form 8962

[al476]

Unmarried couple with 2 children. For tax purposes, she claims one child I claim the other. I claim Head of household status. Listed both kids but 1 is classified as not a dependent.

For insurance purposes, policy is purchased through the state program. I enrolled both kids and myself and she enrolled herself. 1095A received for me lists the 3 of us. Her 1095A lists just her. 

When I look at my form 8962 it only lists 2 in the tax family. And it computes that I need to repay some of the advanced discount. I am assuming it is because the program has listed only 2 in the tax family. Shouldn't this be 3? Do I need to change this to 3? If so how do I do that?

[JamesG1]

Correct the 1095-A to reflect all three family members by following these steps:

• Click on the magnifying glass in the upper right hand corner of the screen.  Enter '1095-A'.
• Click on 'jump to 1095-A'
• At the screen Here's what we have for your 1095-A's, click Edit to the right of the form to be corrected.

[al476]

Thank you James. I did what you listed here but once I click on edit it doesn't give me any way to add the 3rd member needed. In fact it doesn't show me any of the people that it should. Only things that show up are Box 1, Box 2 input from the form and part III to enter in monthly amounts. Part II of form 8962 doesn't even come up.

Suggestions?

[RaifH]

Since your second child is not a member of your tax household, a portion of your 1095-A must be allocated to your partner's tax return. 

You can allocate the policy and the advanced premiums paid between yourself and your partner how you wish, as long as the entire amount is being claimed. To allocate the plan in TurboTax:

1. In Federal > Deductions & Credits scroll down to Medical and click Start/Revisit next to Affordable Care Act (Form 1095-A)
2. Enter the information as it appears on Form 1095-A.
3. Let us know if these situations apply to you click I shared the policy with another taxpayer who's not on my taxes.
4. Enter the allocation information that you have determined. Use your partner's social security number, not your child's on the allocation screen. The three percentages must be equal, if you are claiming 75% of the premium percentage, you must also claim 75% of the SLCSP percentage and the advanced payment of PTC percentage. 

Please note when your partner files, they must claim whatever percentage you did not. If you claimed 75%, she must claim the other 25%. Do not do the allocation yourself from the numbers on the form. Enter Form 1095-A with the exact numbers it reports. 

[al476]

RaiH,

Thank you for the reply. When I try to follow the directions you provided Turbo Tax doesn't respond they way you describe. When I click on form 1095-A it doesn't give me the option to enter in the information just like it is on the form I received. It only allows me to enter basic information, Box 1, Box 2 and Part 3 of the form. It doesn't allow for entry of the names of people on the form, SS numbers, etc. 

The only way I can enter the needed information is to go to view the forms and look at form 1095-A. I can enter it there. But when I go to form 8962 and look at it, Line 1 in Part I only shows 2 in the tax family, even though I listed 3 on form 1095-A. The program will not allow me to override this and change it to 3, which I am assuming it should show. Because of this I am also assuming it is not calculating this correctly.

Same issues apply when trying to do the partners return. Hers the program is saying she was under paid and wants to add a refund amount. Again I am assuming this is not correct as hers is showing 2 people even though only 1 is listed on 1095-A.

Are my assumptions correct? How can I correct this issue?

Thanks for any help anyone can give me.

[RaifH]

By allocating the amounts on Form 1095-A, you are not increasing your tax family size. That will remain at two. The only way to increase your tax family is to add your second child as a dependent, which of course means that your partner would not be able to claim that child. You are allocating a portion of the advanced tax credit received to your other child that will be reported on your partner's return. 

You want to enter Form 1095-A exactly as it is reported to you for Boxes 1, 2, and Part III. Once you are done entering Form 1095-A and hit Continue, that is when TurboTax asks Let us know if these situations apply to you. One of the options is I shared this policy with another taxpayer who's not on my taxes.

This will allocate the premium tax credit you have received between your return and your partner's return. It will not change the calculation based on your household size, because that will remain at two. It should still reduce the amount of advanced premium tax credit you have to repay, but it is a completely different way to go about doing it than by increasing your household size. Again, the only way to increase your household size is by claiming your second child. 

[al476]

RaifH,

Once again thanks for the reply. I understand what you explained. I did go ahead and fill out 8962 manually off line and came up with the amount Turbo Tax did. How ever when I did a manual form for my partner using just one person on 1095-A I get a lessor amount than Turbo Tax did. In other words as lessor credit amount by about $700. In both cases the amount on line 4 of form 8962(Federal Poverty line) was changed because of the number of people. In my case it made no difference to the bottom line, but in hers it did. But again I can not override the family size in the software. Am I looking at this wrong? 

On her return do I need to also input my 1095-A information, as a second form, so it is sent along with hers?

Just don't want the Fed to hold up the returns because it was filled out wrong.

Thanks

[RaifH]

Yes, you are approaching the tax family size incorrectly. If you look at Form 8962 instructions for Line 1, tax family size, "your tax family generally includes you, your spouse if you are filing a joint return, and your dependents." It is not based on how many people are receiving marketplace insurance. The number is only modified if you are allocating a plan and the taxpayer receiving the allocation is receiving 0% of the plan. In that case, the family size is 0. 

Even though only the child your partner is claiming is being covered by marketplace insurance, her family size would be two. The calculation is based on the poverty level for the household size, not the amount of people receiving coverage. 

If TurboTax was calculating her premium tax credit based on a household size of two and you were using a household size of one, then that would result in a larger credit using TurboTax's calculations.

On your form it might not matter because if your income is 400% above the poverty level based on your household size, whether your household size is two or three, then it would not impact the calculation. To put it into numbers, the poverty level for 2 in most states is $17,240 and $21,270 for 3. If your income is more than $85,080 you are not receiving premium tax credit regardless of whether your household contains two or three people.  

[al476]

Again thanks. I get the tax family size as you explain it. In my case my partner is receiving 0% of the allocation, so  her tax family should be "0"? If so how do I override what the program is putting in?

On mine, poverty level is the $17240 even though with 3 on the medical plan it should be $21270. On hers it is $17240, but shouldn't it be $12760? Advanced payment of the PTC at the time of enrolment was based on a family of 3 and a family of 1. It appears to me that Turbo Tax is looking at it based on 2 families of 2 each. Or doesn't this matter because The calculation is based on the poverty level for the household size, not the amount of people receiving coverage. 

[al476]

Can someone please let me know if I need to worry about the amounts of the poverty level being incorrect.

thanks

[MarilynG1]

No, don't worry about the Federal Poverty amount on Form 8962 being incorrect.  
Most of the lines in Part 1 are calculated automatically from other parts of the return and from the tables found in the Form 8962 instructions.

You may need to enter your dependent's income before completing this form (if this applies). This is because "Household Income" includes the income from all members of the "Tax Family' so yes, it's based on household size, not covered individuals.

Click this link for more info on How is the Premium Tax Credit Calculated.