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I have a client that purchased Obama Care family.

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I have a client that...
I have a client that purchased Obama Care for the family. Based on their estimated income when they purchased the insurance from the exchange they were allowed a premium tax credit. The policy covered the husband and wife and their two children. However, one of the children on the policy was their 24 year old son who was not in school and filed his own return claiming himself as a dependent. When I try to complete Form 8962, line 2b instructs you to add the modified AGI of your dependents. My question is if the son is not a dependent of the parents, must I include his income on line 2b of Form 8962?
Submitted: 1 year ago.Category: Tax
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Answered in 19 minutes by:
5/17/2016
Tax Professional: emc011075, Tax adviser replied 1 year ago
emc011075
emc011075, Tax adviser
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Hi. My name is ***** ***** I will be happy to help you.If the parents are not claiming him and he is claiming himself (he is taking his own exemption), than you do not need to include his income on line 2b. But you will need to do allocation, since he is on the policy but not on the return. You will also have to give copy of 1095A to him, he will need it to complete his own return. You can allocate the entire premium and the credit to the remaining family member or you can allocate it equally between all family members.
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Customer reply replied 1 year ago
Do the parent's need to claim the son's AGI on their return when computing the premium tax credit? I still don't understand what has to happen on the Son's return due to the fact that he was on the parents Insurance Policy, but he personally didn't get a credit. The son's AGI was only $6723
Tax Professional: emc011075, Tax adviser replied 1 year ago
If the son is claiming himself you do not include his income on the parent's 8962. He will need to file his own 8962. If the son was on the parent's insurance policy, some of the credit was for him being claimed as their dependent. So you have a choice. You can allocate some of the premium and credit to the son or you can claim the entire amount on the parent's return. You do not need to allocate anything to the son but because he is on the policy but not on the return he will also have to file his own 8962 and show the allocation.
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Tax Professional: emc011075, Tax adviser replied 1 year ago
You have one policy but two returns (households) so you need two 8962s; one for the parents and one for the son. You will also need to give copy of parent's 1095A to the son.
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Tax Professional: emc011075, Tax adviser replied 1 year ago
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