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.

Posts: 1
Registered: ‎01-25-2018

ACA Penalty-no income and claimed by parents

I am a parent of a qualifying dependent (adult child, 25 yo). She lost Medicaid in 2017 after her child was born and was not covered by health insurance for 10 of 12 months. She did not earn any income as she is a single mother of two and lived in my home where I provided for expenses except for state assistance she received.


She did not earn income for 2017 so she would not have to file a tax return and according to would not incur the penalty (since she couldn't pay for insurance or the penalty anyways). Instead, I am claiming her as a qualifying dependent with her two children (my grandchildren).


Am I liable to pay for the penalty myself since I claim her (HR Block software is taking the penalty out of my refund/taxes paid) or is there a way to show she did not earn income so she could not pay the penalty, even if claimed on my return? She may be eligible for another exemption according to as well, so that may be an alternative.


Thank you.

Posts: 113
Registered: ‎01-08-2018

Re: ACA Penalty-no income and claimed by parents

Hello mjgrego73!


Welcome to The H&R Block Community!



Because she is part of your tax household and is being claimed as a dependent on your tax return, the IRS uses your income to decide whether or not you could afford health care coverage for your dependent. If your income is high enough to not qualify for an exemption, you will be required to pay the penalty, which is what the program is calculating. 


The following publication gives more information regarding health care coverage exemptions and the definition of a tax household:



If you have any further questions, I'll be happy to help!



Tax Research Specialist