Health Care

Health Care

How do health care reform and taxes connect? The Affordable Care Act is single largest change to the tax code in two decades. Find help navigating the complexities of the new health care legislation, Medicare, Medicaid and other medical deductions.

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Pioneer
Posts: 2
Registered: ‎02-05-2018

ACA Penalty and Divorce Situation

Not sure how to solve this one:

 

I have Marketplace insurance.  My two children ages 19 and 22 are my dependents and claimed by me.  However, they both are and have long been covered by their father's health insurance, though they live with me (extended out from the divorce).  In any event, I have nothing to do with their health coverage.

 

This year my daughter earned over the $6350 threshold so I went ahead and entered her AGI--and it totally killed my entire ACA--it's forcing me to pay back the ENTIRE amount I paid out, because of having to list her income.  It was almost $1,500 I cannot afford to lose.

 

This seems ridiculous--did I do the entry wrong?  Is this really a thing?

Associate (Neighbor)
Posts: 400
Registered: ‎04-03-2013

Re: ACA Penalty and Divorce Situation

[ Edited ]

Hello,

 

In reading your scenario it looks like the AGI might be disqualifying your daughter as your dependent. Based upon the ages you have mentioned that could be correct if they are not a full time student or disabled. You can read about the rules here: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/qualifying-child-rules

 

If you daughter is a full time student then I would recommend checking how the program's questions have been answered. If she is not a student then based upon that income she will not meet the test to be a dependent.

 

If this is not the case and it is just the ACA, that would require more information and I would recommend speaking with a tax professional who can review everything.

 

Regards,

Caleb

Pioneer
Posts: 2
Registered: ‎02-05-2018

Re: ACA Penalty and Divorce Situation

She's a graduate student now, but was finishing her last year of college in the first part of 2017.  The problem is she is on a stipend for her graduate program, so she made more than the $6350 threshold--so much so that it throws me WAY over the limit and I'm getting hit for the full amount of my ACA subsidy.  I thought it would be capped at like $600 but instead it is taking the entire ~$1500. 

 

Not listing her as a dependent hits me even harder, but this is just incredibly frustrating because her income is her own--now that she is at school, and I haven't had any responsibility for her healthcare in years.  It's just such a significant hit to my refund that I'm hoping there is a way to claim her but not lose so much.