Marketplace Insurance and Medicaid - Tax implications

[AsifN]

I think I may have unknowingly created a mess. I am a Texas resident, and my son is a medical student in a different state while maintaining his residency in Texas. When he turned 26 in 2024, he got dropped out of commercial insurance (offered from my employer). I wasn't sure if he qualified for Medicaid and if so, does it make sense for him to apply in Texas or where he was attending medical school. I spoke to a few marketplace agents and they suggested for him to apply for Medicaid in the state where was attending the medical school. So he did. Didn't hear anything for 3 months. I had Cobra (that I could get retroactively) so I wasn't too worried about the gap for up to 3 months.

When 3 months were almost up, I contacted a marketplace agent and got him a coverage (Texas based) where he had to pay under $10 and he got tax credit (PTC?) for the rest of the premium cost. The agent didn't tell me anything about his qualification requirements for marketplace insurance. I have never had marketplace insurance and know nothing about this. He basically filled out all the forms. 

A few days after my son received the marketplace insurance, his Medicaid in another state also came through which is what he used there a few times he had to visit the doctor. 

The marketplace was setup on autopay and I had no idea that I needed to cancel the marketplace now that he had Medicaid. So basically, he had coverage through Medicaid in another state and he also had Marketplace insurance coverage in Texas. 

I am worried sick about what to do next as the time to file taxes is around the corner. 

Any expert advice as to what I need to do??

Thanks in advance!

[MinhT1]

Your son is not allowed to have both Medicaid and a Marketplace policy.

If he did, then he is not entitled to the premium tax credit for the months he also had both. He should indicate in TurboTax the months he had both. TurboTax would then calculate the amount of premium tax credit that he has to repay and add it to his tax lability.

[AsifN]

I understand that and that is why I am asking the questions. 

However, there is no place in the tax forms to indicate Medicate enrollment. How do I specify in TurboTax that he had both?

[AsifN]

I am bumping this thread up with another piece of information. So even though he was eligible for marketplace at the time when the marketplace application was filed by the agent, he ended up having $0 income in the year he had marketplace. As indicated earlier, he is a medical student and that alone kept him busy and he had no time to work. Does he still have to repay APTC?

[Vanessa A]

You are correct, there is currently not a way in TurboTax to indicate that he was eligible or had other insurance. This is currently being looked into. 

Since he was not eligible for those months, yes, he would technically be responsible for the repayment of the credit. 

If he had $0 income he would have a repayment cap of $375 as his income would be less than 200% of the Federal Poverty Line.

Since TurboTax is not currently able to handle this issue in the Do It Yourself software, you can either reach out to a Tax Professional for help with filing his return or you can print and mail the tax return along with a manually calculated form 8962.  In Column (e) Part II rows 1-12 you would need to enter $0 for the months he was not eligible for the Premium Tax Credit.  

I would also suggest attaching a statement explaining that he was not eligible for the Premium tax credit since he was also enrolled in Medicaid.