ACA and Insurance for Dependent

[S T]

Question has arisen,

Husband and wife are in the throws of divorce. Wife is applying for insurance coverage on herself only. Husband will maintain insurance for the daughter trhough Employer Group Coverage - Wife will be claiming the daughter as a dependent.

As wife is claiming daughter as a dependent for tax purposes, is she obligated to maintain the insurance on her policy for the dependent , or just provide proof of insurance from the husband's group coverage.

Thanks,

Sandy

[TaxGuyBill]

I am pretty sure that the daughter only needs to be covered, and doesn't matter by which parent.

However, the insurance companies will be sending out a year end form (like a 1098). The wife MIGHT need to get a copy of the one that the husband gets for insurance purposes. Until they produce the tax forms, I'm not sure.

[S T]

Thanks for that info,

Is there a site that might explain how this is going to work for dependent coverage when there are issues with one parent maintaining the coverage and the other parent is claiming the dependent

The reporting on these issues for 2014 are going to be another exercise.

Thanks

Sandy

[TaxGuyBill]

I'm not aware of anything. However, as the year goes on, I expect to see more guidance from the IRS.


Interestingly, the IRS has release Regulations about the penalty for divorced parents. Even if the custodial parent gives the exemption to non-custodial parent to claim the dependent, it is the CUSTODIAL parent subject to the penalty.

The IRS has not specifically made remarks about how that would work for the credit, but the wording is the same in both IRC Sections, so I would THINK that the custodial parent still qualifies for the credit if the noncustodial parent claims the child.

http://www.irs.gov/irb/2013-39_IRB/ar09.html#d0e1915