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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
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Question about allocating 1095-A on form 8962 between

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Question about allocating 1095-A on form 8962 between parents return and independent daughter who files her own return but was on the same marketplace health insurance as her parents. The daughter didn’t receive a separate 1095-A as the insurance wasn’t notified that she was not a dependent for tax purposes and is simply listed as a covered member under her parents 1095-A form.
The greatest tax benefit would be to allocate 100 % of 1095-A (columns A through C) to the daughter who makes a much smaller income (although she is above the poverty line). And the parents will accordingly enter their 1095-A info on form 8962 but allocate 0 percent to them since the daughter will have already taken the full allocation.
Also important to note – there was a monthly advance payment of premium tax credit (column C) paid throughout the year of nearly $8,000. Based on the daughters low income level, the refund that she’d be due just from allocating 100 percent to her on form 8962 would be over $4,000 as she would basically be due near the max credit which I believe is over 12,000 (12K – 8K already received = 4K refund).
I don’t yet have the exact scenario of the parents return because they haven’t filed yet but it would obviously be a much smaller refund owed from 8962 if all or a portion was allocated to them.
Will the IRS allow this allocation method of 100 to child and 0 percent to daughter in this scenario?
Submitted: 5 months ago.
Category: Tax
Expert:  Michael replied 5 months ago.

Similar to tuition credits, it is going to depend on who 'paid' for the premiums. The IRS deems that the taxpayer that pays for the expense is who rightfully can claim the deduction (or calculated credit, in this case). Thus, it would be defensible that the daughter could claim the full premium credit if she bore the economic burden of the insurance premiums for the year. The fact that she is filing a separate return (and not being claimed as a dependent) would lend further credence to the position. You'll want to be careful that the premiums weren't deducted from a parent's paycheck, though. Hope that helps.