TP has eligible dependent who lives in household, but decides not to claim dependent on the TP's return. I know you have to consider the non-claimed dependent's income in calculating HHI. But suppose the TP has minimum essential coverage. Do you have to have proof of insurance for the unclaimed dependent as well, if you are not filing a tax return for that dependent? Or if the dependent is not filing at all?
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Last edited by Burke; 12-29-2014, 01:46 PM. -
Dependents
According to my aforementioned tax book, the dependent's income is only included in household income if he is required to file a tax return.Originally posted by Burke View Post
It doesn't say anything about having to have "proof" (if you meant that literally) of insurance, but it does say that if the parents household income is enough to put them over their filing threshold, then they (barring exemptions) must have coverage for themselves and the dependent also whether he files or not. They note that for purposes of determining whether the dependent is exempt from the health coverage mandate the dependent's filing threshold is considered to be the same amount as the parents (not whether he should file a return -- that remains at $6,200) because if dependents had little or no income then their own filing exemption would automatically exempt them from the insurance mandate. So anyway, they're saying that dependency exemptions have no effect on household income and if parents make enough to file, then they owe health insurance on their kid -- if they don't make enough to file then the kid's exempt.
Hope this helps, but I don't know - this stuff is a nightmare. I wish instead that they had just borrowed another trillion or so from China and sent it straight to the insurance companies.Last edited by Black Bart; 12-30-2014, 12:14 AM. -
I guess I get it. The clients I have in mind have a child living at home who is in their late twenties and they say the child doesn't work or have a job. They claim as a dependent every year and say the child doesn't file a return. Has not been in school for years and is not disabled. Wife has a good job and is well over the MFJ threshold. I don't know whether the child is covered under her group ins or not. From what you say, I need to know that. And if not?Last edited by Burke; 12-29-2014, 01:45 PM.Comment
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I believe the answer is yes. The dependents need coverage also.Originally posted by Burke View Post
From the 1040 draft instructions for line 61:
If you had qualifying health care coverage (called minimum essential coverage) for every month of 2014 for yourself, your spouse (if filing jointly), and anyone you could or did claim as a dependent, check the box on this line and leave the entry space blank.
Otherwise, do not check the box on this line and see the instructions for Form 8965.Comment
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Same issue discussed here: http://forum.thetaxbook.com/showthre...pendent-Really
It seems the late 20's child could create a penalty for the taxpayer.Comment
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Yes, but if the wife's "good job" offers a family plan and they didn't have too much household income, then the child would qualify for the coverage exemption listed under "Aggregate self-only coverage considered unaffordable" on page two of the instructions for form 8965.Originally posted by David1980 View PostLast edited by Black Bart; 12-30-2014, 01:16 AM.Comment
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Good grief. I was thinking the child could not be covered after age 26 on the parents' insurance.Comment
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Actually you're right. He wouldn't be eligible for the family plan. I missed the part about "late" twenties. Sorry.Originally posted by Burke View PostComment
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So.....if he has no insurance coverage, the ISRP for the parents' return is $334? I did the worksheet and that is what I am getting. HH income is $57,314. Threshold MFJ is $23,900 (using 2013 figures.)Last edited by Burke; 01-02-2015, 04:46 PM.Comment
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Sounds right. Will go up next year of course, 2% instead of 1%.Comment
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