Is it mandatory that I claim my dependents? Or can I not claim my dependents so they can keep their PTC benefit?

[DoninGA]

Claiming someone as a dependent does not mean that they cannot continue to be insured through the Health Insurance Marketplace

[garyrademan908]

I agree. But if that someone is a dependent they can't claim the PTC.

[TaxGuyBill · Accepted solution]

Although you don't need to claim them as dependents, if you are ABLE to claim them as dependents, they are not eligible for the Premium Tax Credit (they also can not claim their own exemption).

However, in some cases, not claiming them might be the best outcome.  If they received Advance Credit (column C of the 1095-A) to reduce their monthly insurance payment, their repayment will likely be limited to a smaller repayment if you do not claim them as dependents.  If you do claim them as dependents, you would receive their exemption deductions, BUT you would likely need to repay most of all of their Advance payrments.

But just a word of caution:  When applying for Marketplace insurance, the dependents need to be honest about their status.  The penalty for intentionally entering false information on a Marketplace application is gigantic.  If it is expected that you will be able to claim them again, they MUST tell that to the Marketplace (or be subject to the gigantic penalty), which would disqualify them from continuing to receive Advance Credits.  

[garyrademan908]

Thanks TaxGuyBill! It's nice to have a second opinion.