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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10156
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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A widowed taxpayer has s health insurance through the Health

Customer Question

A widowed taxpayer has his health insurance through the Health Insurance Marketplace in 2015 & receives a subsidy based on a family size of 3, as he has 2 dependents. He can no longer claim his 25 year old son in 2016, as the son must file his own tax
return based on his income. Is there any way that he can include the son on his health insurance coverage, as he is under 26, or does the son have to purchase his own health insurance for 2016?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

Hi,

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I hold a JD (Juris Doctorate, a doctoral degree in the law), concentration in Tax Law & Corporate law, an MBA (specialization in finance & tax), and BBA from Mercer University's Stetson School of Business and Economics, as well as CFP and CRPS designations. … I can help here

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No under ACA insurance companies are no longer permitted to drop independent children from their parents' insurance policies. Instead, providers are required to keep both dependent and independent children on their parents' insurance policies for the first 25 years of their lives.

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Expert:  Lane replied 1 year ago.

You an read more about this here:

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http://thelawdictionary.org/article/can-i-be-a-non-dependent-and-still-remain-on-my-parents-health-insurance/

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ANd here's the guidance from healthcare.gov:

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Here: https://www.healthcare.gov/young-adults/children-under-26/

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You can stay on a parent’s plan until you turn 26

Once you’re on a parent’s plan, in most cases you can stay on it until you turn 26. (Check with the plan to be sure. Some states and plans have different rules.)

Generally, you can join a parent’s plan and stay on until you turn 26 even if you:

  • Get married
  • Have or adopt a child
  • Start or leave school
  • Live in or out of your parent’s home
  • Aren’t claimed as a tax dependent
  • Turn down an offer of job-based coverage
Expert:  Lane replied 1 year ago.

Hope this has helped

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Lane

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If this HAS helped, (and you don't have any other questions on this), I'd really appreciate a positive rating (using those stars on your screen) … That's the only way I'll be credited with a portion of what you've paid JustAnswer.com

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Thank you,

Lane

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Customer: replied 1 year ago.
The son is a young professional who is doing extremely well (will earn more than 100,000 in 2016). If the taxpayer includes the son as a dependent, wouldn't he also have to include the son's income in the total family income which is submitted to the Health Insurance marketplace (which will eliminate the subsidy the taxpayer receives)?
Expert:  Lane replied 1 year ago.

The son, living rent free with the taxpayer is not (and given what you've said about his income, wouldmn't qualify as) a dependent (hrough qualifying child OR qualifying relative test)

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This is what property law calls tennant at will ... (letting someone live with you - or in property you own - rent free)

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He would not be counted in the household at all. He's not being supported.

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What would hurt any means testing for medicaid or SSI (or any other means tested benefit) would be his contributing to the houshold in some way ... PAYING rent, buying groceries, etc.

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Simply moving back in with mom, alone, does not make him a dependant

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Customer: replied 1 year ago.
I recognize that by moving back in with the taxpayer, the son is not a dependent on the taxpayer's 2016 income tax return. However, when completing the application for insurance on the Health Insurance Marketplace, there is a question which asks for the number of dependents. It then asks for the dependent information & the family income. Therefore, does the son's income get included in the "family income"?
Expert:  Lane replied 1 year ago.

No, he is not being supported by the household ... he is not a part of the househld ... he is an adlt child that lives there.

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We see this a lot when the real reason the adult child is there is to help with the care of the mother... (not financially)

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... to help with issues such as dimentia, companionship, essentially sitting service

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especially with one of the parents being in skilled nursing.

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Again, if he is in any way injecting income into the househood (even gifts) THAT's a proiblem.

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But he is not counted as part of the household, becasue he is not being supported in any way. He is living there rent [free]

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This is called tennancy at will .... in the common law

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Now, the minute he injects assets or income into the situation, this changes the situation

Expert:  Lane replied 1 year ago.

Read this: https://www.healthcare.gov/income-and-household-information/household-size/

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In ACA terminology the person would be called a roommate.

Expert:  Lane replied 1 year ago.

Tax filer + spouse + tax dependents = household

Follow these basic rules when including members of your household:

  • Include your spouse if you’re legally married.
  • If you plan to claim someone as a tax dependent for 2016, do include them on your application.
  • If you won’t claim them as a tax dependent, don’t include them.
  • Include your spouse and tax dependents even if they don’t need health coverage.

See the limited exceptions to these basic rules in the chart below.

Learn more about who you can claim as a tax dependent from the IRS.

Who to include in your household

RelationshipInclude in household?Notes

Dependent children, including adopted and foster children

Yes

Include any child you’ll claim as a tax dependent, regardless of age.

Children, shared custody

Sometimes

Include children whose custody you share onlyduring years you claim them as tax dependents.

Non-dependent child under 26

Sometimes

Include them only if you want to cover them on your Marketplace plan.

Children under 21 you take care of

Yes

Include any child under 21 you take care of and who lives with you, even if not your tax dependent.

Unborn children

No

Don’t include a baby until it’s born. You have up to 60 days after the birth to enroll your baby.

Dependent parents

Yes

Include parents only if you’llclaim them as tax dependents.

Dependent siblings and other relatives

Yes

Include them only if you’llclaim them as tax dependents.

Spouse

Yes

Include your legally married spouse, whether opposite sex or same sex. In most cases, married couples must file taxes jointly to qualify for savings.

Legally separated spouse

No

Don’t include a legally separated spouse, even if you live together.

Divorced spouse

No

Don't include a former spouse, even if you live together.

Spouse, living apart

Yes

Include your spouse unless you’re legally separated or divorced. (See next row for an important exception.)

Spouse, if you’re a victim of domestic abuse, domestic violence, or spousal abandonment

Not required

In these cases, you don’t have to include your spouse.See rules for victims of domestic abuse, domestic violence, or spousal abandonment.

Unmarried domestic partner

Sometimes

Include an unmarried domestic partner only if you have a child together or you’ll claim your partner as a tax dependent.

Roommate

No

Don’t include people you just live with — unless they’re a spouse, tax dependent, or covered by another exception in this chart.

Expert:  Lane replied 1 year ago.

Formatting didn't transfer well there, but as you can see, this adult child is not included as part off the houshold.

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Hope this has helped to, clarify

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I hope you'll rate me positively, using the stars on your screen … (that's the only way we get credit for the work here) … based on thoroughness and accuracy, ... and pay particular attention to the last statement on the chart ... I'll paste again here and underline for emplasis

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Don’t include people you just live with — unless they’re a spouse, tax dependent, or covered by another exception in this chart.

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Thank you,

Lane

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Expert:  Lane replied 1 year ago.

Did you see my answer?

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If so, would apprecuate a positive rrating using those stars on your screen ... That's the only way we will be credited by JA for the time here

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Thanks,

Lane

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