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1095 A Allocation of shared policy - Daughter below poverty line

Level 1
My client and her daughter were on a shared market place policy for 2020. Turned out that the daughter is no longer the taxpayers dependent as she got a job in 2020. I was planning to allocate the policy 0%  to the client and 100% to the daughter as that was more favorable outcome as a family. The question is if the daughter would qualify for PTC if she is only at 50% of poverty line? My understanding is that since the market place qualified the mother for the policy, that qualification carries over to both tax family. Therefore it should be OK to allocate 100% to the daughter.
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2 Replies 2
Level 15

Although the law and regulations make this situation a bit questionable, YES, the IRS has been allowing that since the Premium Tax Credit in 2014. 

But you might want to let the client know that it is possibly a "gray area", in case the IRS changes their mind on how they have been treating this situation.

Level 1

Hi, I have a follow up question on this situation. I filed the taxes with 100% attributable to the daughter to get the maximum refund back and advised the client that this is a gray area. After I filed, the client received a 1095 C with 1A in line 14 for nov and dec and blanks on line 16 for the same months. I read the instructions and it appears that as long as they do not have a 2C on line 16, it does not affect the premium tax credit. Do I need to do anything further?

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