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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29965
Experience:  Taxes, Immigration, Labor Relations
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My friend has claimed her unemployed adult son as a dependent

Customer Question

My friend has claimed her unemployed adult son as a dependent for 2014 and 2015. He was married until January of 2015 and his wife had enrolled them in the Marketplace for health insurance in 2013.
My friend who is on Medicare and who did support her son although he didn't live with her, just got a letter from the IRS stating that someone she claimed on her tax return was enrolled in the marketplace health insurance and requested her to submit a 1095-A and the 8962 for the premium tax whatever. Sorry, I know nothing about Obama Care.
I told her that since her son was enrolled for two years that he cannot be claimed as her dependent and that she must remove him from her two tax returns by submitting amended returns.
Question ONE: Is that correct? He cannot AMEND his health insurance enrollment, so she must remove him from her 2014 and 2015 returns.
This is very complex and I will pay accordingly.
Question Two: Since her son was divorced in January of 2015 and since his wife (now ex, but they are still living together as friends and co-parenting) lost her job and she had no income but still received the subsidy what do they do?
Question Three: They are broke, can't find any tax forms, and haven't filed since 2012. Granted, they should be castigated severely, but what do they do exactly to correct his nightmare? Apply for Medicaid immediately. They are still covered under Blue Cross but they have a $2600 past due bill and cannot pay it.
Thank you exceedingly.
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
I guess I should be specific. Should this man and his ex-wife call the insurance company, explain that they didn't know what to do (true and didn't know this was even a problem until the man's mother called them crying), and they didn't even know the man's mother had claimed him as a dependent. T
Customer: replied 1 year ago.
Thanks for your help, Jonathon.
Customer: replied 1 year ago.
Jonathon, are you completing my answer? I signed up for prompt answers but I really need to calm my friend down, and the time estimator keeps saying 8 minutes, every EIGHT minutes. I will give a good tip. Thanks.
Expert:  Jonathan Tierney replied 1 year ago.
The first question is whether or not her son was her dependent. To determine that, we have to know what his income was for 2014 and 2015. If his gross income in either year is more than $4,000, he cannot be her dependent.
Expert:  Jonathan Tierney replied 1 year ago.
When did your friend's son move back in with his former wife? Or did his ex-wife and child move in with him and his mother?
Expert:  Jonathan Tierney replied 1 year ago.
They will not be able to go back and retroactively get health insurance for 2014 or 2015.
Customer: replied 1 year ago.
His gross income was more than $4000 in 2014 if you use his joint income since he was married. In 2015 it was less than $4000. His ex-wife moved back in with him as friends in February of 2015.
Expert:  Jonathan Tierney replied 1 year ago.
They always could try to apply for Medicaid, are they getting their insurance premiums subsidized with the tax credits available?
Expert:  Jonathan Tierney replied 1 year ago.
You would only consider his income to determine if he is his mom's dependent, so he would be a dependent for both years.
Customer: replied 1 year ago.
THEY DID have health insurance the entire time. My point is that because the SON did have insurance he cannot be claimed on his mother's tax return as a dependent since he had already enrolled in the Obama Care marketplace coverage.That is what all the rules say. You cannot apply for marketplace insurance if you can be claimed as a dependent on someone else's tax return. The problem is what does his MOTHER do now? She cannot get the 1095 in her name since she didn't pay for the coverage and was not entitled to claim her son.
Expert:  Jonathan Tierney replied 1 year ago.
Who paid for her son's coverage then?
Customer: replied 1 year ago.
His wife did for 2014 and all or 2015, even though they weren't legally married for ten months.
Expert:  Jonathan Tierney replied 1 year ago.
The mother only need to demonstrate that her dependents had health insurance, and it can come from any source, such as a dependents employment. In 2014 companies were not required to issue a 1095, and his wife should get a 1095 for 2015 to prove that he was insured.
Customer: replied 1 year ago.
The problem is that the subsidy they received was based on her income, which ceased. So now they owe money. This is such a mess, but I need first to relieve the mother and direct her. I should tell you that I have a Ph.D. in Finance, but I have had NO exposure to this Obama care quagmire.
Customer: replied 1 year ago.
What about the ruling that you can't have the marketplace coverage if you can be claimed as a dependent on someone else's tax return. Since he had the coverage, doesn't the mother need to remove him as a dependent?
Customer: replied 1 year ago.
Since the mother has EXTREMELY high income, if somehow she can claim her son as a dependent she will lose the premium tax credit since her income is so high and wouldn't she then need to repay all the money given to the as a subsidy to pay for his coverage. Wouldn't it then be prudent for her to remove him and have him file is own taxes?
Expert:  Jonathan Tierney replied 1 year ago.
Okay, then the mother only needs to he has insurance. They obtained coverage through the marketplace anyway, regardless of the rule, they may not have correctly completed the enrollment application or may be in violation of the marketplace rules, but since his wife had the policy, that is not really her problem.
Expert:  Jonathan Tierney replied 1 year ago.
She can remove her son as a dependent if she wants.
Customer: replied 1 year ago.
Sorry, earlier when I said HER income I meant the wife's income, which ceased. The mother is wealthy and has a high income even in retirement. If she continues claiming her son she will have to repay the full subsidy, right? Since claiming him as a dependent the subsidy would prorate by HER income. I hate to hammer this but I need the best way to help her.
Customer: replied 1 year ago.
But is that the best way to proceed, money-wise, for her since she won't qualify for the premium tax credit if her income is high?
Customer: replied 1 year ago.
I don't think you're hearing me, and this has been a waste of time. Sorry.
Customer: replied 1 year ago.
How can I end this question? Unless you can specifically answer my concerns.
Expert:  Lev replied 1 year ago.
Hi,It looks as you posted the same question again?Please verify if that is correct or posted by mistake?