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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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Here is my scenario...married couple lived together in a

Customer Question

Here is my scenario...married couple lived together in a community property state. One has earned wages of approximately $45K, the other received SS in the amount of about $31K. The one that earned wages had health insurance through the market place using the premium tax credit to pay the premium. The one who received SS does not have insurance. MFJ has them owing $4K. MFS has them owing less, but I am unsure my software is calculating correctly. Am I correct that SS is fully taxable when MFS? Also how to I allocate in a community property state.
Submitted: 9 months ago.
Category: Tax
Expert:  Lev replied 9 months ago.

See page 8

https://www.irs.gov/pub/irs-pdf/p555.pdf

Social security benefits. Treat social security and equivalent railroad retirement benefits as the income of the spouse who receives the benefits.

So social security benefits are treated as separate income if spouses are filing separately.

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Social security benefits are partly taxable - and there is a special worksheet to calculate taxable amount.

If they file jointly - $20,025 of social security benefits are taxable.

If they file separately - assuming living together - taxable portion of social security benefits is $26,350

So combined tax liability might be different.

Expert:  Lev replied 9 months ago.

.

Regarding health insurance premium tax credit - it is based on total household income - so that should not based on how they file.

If you provide forms 8962 I will verify.

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