Dependent's income and ACA penalty

[JenMO]

Couple has 1 child under 18 that made $7776, which I believe the dependent's threshold is 7750. So when figuring household income on the shared responsibility worksheet, do I add the whole $7776 to the parents income? (line 7)

[TaxGuyBill]

Yes, the dependent's full MAGI (the threshold is $6200) is added to the parent's MAGI to get the "Household Income" on the worksheet.

[JenMO]

So, if dependent's income was only $5000, that amount would not have to be added in?

[TaxGuyBill]

Correct.

Well, that's correct if it was all "earned" income". "Unearned" income has a lower filing threshold.

Although the Instructions aren't written this way, the way I read the law is that is would be "taxable income" on Line 43 of the 1040. That would mean that if the Child were to make a Traditional IRA contribution to get their AGI under $6200 (with $0 "taxable income"), their MAGI would not be added to the parent's MAGI.

[JenMO]

Crazy, thanks