For 2021, I had my nondependent 23 year old child on my marketplace policy for the first four months of the year. I removed her from my marketplace policy at the end of April, at which time she commenced coverage on a non-marketplace policy, with no advance credit payments, that she obtained directly from a private insurer. I have read the instructions for Form 8962 and cannot figure out how to (or whether I need to) do any allocation for the first four months of the year. The instructions, and various examples provided within, do not appear to address this circumstance.
For the four months that your daughter was on your policy you can allocate the amounts in any way you both agree. This means you can allocate 100% to yourself, or you can split it anyway you choose. There is not a rule on what percentage to allocate to who.
So does this mean that my daughter is required to file Form 8962 with her return, even though she was on a non-marketplace plan after leaving my plan and presumably will not be receiving her own Form 1095-A? If so, how is Part IV of Form 8962 completed since it requests a policy number (and other information) from Form 1095-A? And how would columns A and B of Part II of Form 8962 be completed with respect to the months she was on my policy? Thanks.
Yes, for the time she was on the policy she will need to enter the 1095-A that you received on her return exactly as it appears. After you enter the 1095 A you will both check the box that says this is a shared policy. On the next screen you will then both enter the other persons Social Security Number as the other taxpayer that you shared the policy with as well as the months the allocation started and stopped, and the percentage of allocation you are each taking. If you are taking 100% and she is taking 0% enter those number or whatever other percentage you have agreed on.
She does not need to enter anything for her insurance as an employee.
Thank you! If you would indulge me again -- to make sure I understand correctly, I can enter 100% on my return, and my daughter 0% on her return (assuming she agrees), in columns e, f, and g on line 30 of our Forms 8962 for the months she was on my policy, correct? (FWIW, I paid the entire policy premium for the months she was on my policy.)
Can you also confirm that I should not include my daughter in completing 1 through 8a of my Form 8962 and that, with respect to lines 12-23 of her form 8962, my daughter should only complete lines 12-15 and leave lines 16-23 blank inasmuch as she had no marketplace plan (or employer-sponsored plan) for May-December 2021.
Also, I do not see a box to check on Form 8962 that refers to a shared policy (unless you are referring to line 9). Finally, as best as I can determine, in our circumstance neither I nor my daughter would complete line 10 of Form 8962 since the instructions lead to that conclusion.
Apologies for all the questions, but I want to make sure I get this right. You have been very helpful, and your assistance is much appreciated.
Yes, you can allocate the premiums however you like. The instructions above (specifically marking the 'shared policy' box refers to the TurboTax program. If you are in TurboTax, you would mark that box and then TurboTax will take the information you entered and calculate any Premium Tax Credit, taking into account any Advance Premium Tax Credit you received. See image below.
Whenever you are entering 1095-A into TurboTax, enter all of the information and let TurboTax complete the 8962 for you. You will only enter information from your 1095-A on each tax return - no information from her non-marketplace insurance on the federal portions of your returns. She may need info from her private plan, but that would be entered on her state return if applicable.
For your daughter's policy, choose the instructions based on what is in columns B and C of your 1095-A that included her for those first few months.
Form 8962 and full Instructions for Form 8962 If you are manually submitting the 8962, you will need these instructions. See Part ll. If you are using TurboTax, this is the screen you will see after you enter the 1095-A data on the previous screen.
Thanks again. What I find curious is that, if I understand all this correctly, if I apportion the allocation 100% to me and 0% to my daughter, the end result, in terms of the net premium tax credit, is that (for the months she was on my policy) I will reap the benefit of the credit as though she were my tax dependent.
Yes ... this is a quirk of the system as it was set up. Also you may have 2 form 1095-As to enter since you did a policy change ... make sure you check your account online : www.Healthcare.gov