Daughter claiming herself but covered under parents 1095-C

[AZ-Tax]

Daughter claiming herself but covered under parents 1095-C. In my Pro Series tax software "Info Wks"", it ask 2 questions:

Can TP be claimed as dependent on another TP's return(such as parent)?

If yes, was TP claimed as dependent on that TP's return?

If first question is marked YES and 2nd question is marked NO, no "Healthcare Wks" populates for Daughter.

If both questions are marked NO, Healthcare Wks populates and Fed tax owed by Daughter is reduced.

Is there a solution for Daughter marking both questions NO, checking the box "Everyone on the tax return was covered by health insurance all year" and attaching the parents 1095-C as a PDF to the daughters tax return?

[Jiggers]

I just mark the "have insurance" box on my software. I don't attach anything to the return nor make any explanation. I don't think there is a need as many 1095's are just arriving on the scene due to the extended due date given by the fools in DC.

I prepared returns since the get-go this year and relied on the client information, the SSA1099 showing medicare, or looking at the client's insurance card.

That is all we are required to do.

[TaxGuyBill]

If you mark the first question as "Yes" (Can anybody claim you as a dependent), the Daughter can not claim her own exemption. That is why there is more tax on that return, not because of any healthcare issues (assuming you are marking that she had insurance all year).

[JMO]

Tax Household = Tax filer + spouse + tax dependents [By filing her own tax return and claiming herself, the daughter is no longer a tax dependent of the parent's household; she's a non-dependent].

It appears that the parents may not have updated their health insurance company to advise of the non-dependent child under the age of 26 on the policy (so as to remove her), which is why you're likely experiencing this precarious situation. See Q2 at http://www.dol.gov/ebsa/faqs/faq-dependentcoverage.html: "The Affordable Care Act requires plans and issuers that offer dependent child coverage to make the coverage available until a child reaches the age of 26. Both married and unmarried children qualify for this coverage. This rule applies to all plans in the individual market and to all employer plans." Also see https://www.law.cornell.edu/uscode/text/26/152 for what a health care provider bases their "dependent" child coverage.

I would mark the daughter's tax return as being covered by health insurance, then attach a disclosure statement. It's also best to advise the client to purchase her own health insurance, and depending on her income, she'll most likely qualify for a tax subsidy.

Side Note: If the parents are paying the full price of the family plan, they may also have to reduce their medical expenses on Sch A for the daughter's portion of the plan, since it represents an expense paid for an individual who is not actually part of their tax household (that expense portion was for someone who belonged to another tax household -- the daughter's tax household).

[TXEA]

If the daughter has coverage, mark the box as covered all year and move on. It does not matter how she gets her coverage. It only matters that she is covered.

It also should not matter that she is claiming her own exemption. There is no need to attach anything to the tax return to explain.

Am I just missing something? I must admit that I have been fortunate in the ACA arena as 99% of my clients have coverage and no credit, so I could be missing something here.