Form 1095-A Shared Policy Allocation

[aedwan]

Taxpayer and wife (MFJ) are recipients of Form 1095-A, with 3 nondependent children listed as covered individuals. Parents’ total income is is above the 400% federal poverty line, resulting in a huge tax bill due to excess advanced premium tax credit.

On the other hand, their nondependent children’s incomes are below the threshold. If 0% is allocated to parents’ return and 100% to child with the lowest income, the parents will not have to pay back any of the excess credit yet the kid will get a huge refund…Sounds like double-dipping, any advice is greatly appreciated!

[aedwan]

I just want to add that all of them live together in same household. Form 8962 Part 1 line 3 asks for total household income but only income of that return flows to line.

[abctax55]

Allocating is allowed, and yes - it can often saves a lot of repayment.

Search for some of @TaxGuyBill 's posts.  I'm surprised he hasn't already posted here (his bat phone must be broken).

[aedwan]

Greatly appreciated, abctax55!

[TaxGuyBill]

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@abctax55 wrote:

Search for some of @TaxGuyBill 's posts.  I'm surprised he hasn't already posted here (his bat phone must be broken).

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🤣

[aedwan]

Thanks abctax55 and thanks TaxGuyBill for great posts on 1095-A allocation. Same scenario applied last year but I allocated 100% to taxpayer who’s main recipient of the 1095a.
Can I amend his and the other person’s 2022 tax returns to redo the allocation so he get a refund of excess repaid or leave it alone? 

[TaxGuyBill]

They could be amended ... but if there is anything audit-able on the tax return, the client may want to leave it alone.  Maybe I'm wrong, but scenario seems like a time where the IRS is going to look closer at the tax return.

What is SUPPOSED to happen is that the clients tell the Marketplace that the child will not be a dependent and then the Marketplace splits things up and sends separate 1095-As.  But the rarely happens, and I *THINK* the Marketplace may be behind that problem.