Married Filing Separately and Pay Back Advanced PTC

[tpnl]

Married couple both on Marketplace health insurance and receiving advanced PTC. Marketplace insurance is in the name of the husband.

Wife sells investment property in 2017. Capital gains are enough that on a joint return the income is more than 400% of poverty level and they need to pay back the entire advanced PTC (just over $9,000).

We use DRAKE software. I run a split calculation. DRAKE is not adding any of the wife's income on the husband's calculation of how much advanced PTC will need to be paid back. DRAKE is only basing the pay back on his income, and it is only making him payback $1500. I don't know if this is correct. What do you think?

I know that you are not eligible to claim PTC if you file separate (I know there are exceptions, but this couple doesn't qualify). But, if you claimed advanced PTC and are filing your tax return after receiving the subsidy, I would think you would have to pay back the entire advanced PTC. I can't find anything that specifically states that a couple who receives advanced PTC will need to pay back the entire credit if they file separate. The form used to calculate what needs to be paid back does have a place for income from dependents, but if you file separate, your spouse is not your dependent.

Kerrie

[Rapid Robert]

Married couple both on Marketplace health insurance and receiving advanced PTC. Marketplace insurance is in the name of the husband.

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I know that you are not eligible to claim PTC if you file separate (I know there are exceptions, but this couple doesn't qualify). But, if you claimed advanced PTC and are filing your tax return after receiving the subsidy, I would think you would have to pay back the entire advanced PTC.

According to one usually reliable tax publishing firm (I won't mention the name in deference to TheTaxBook publishers, hosts of this forum).

"If taxpayers file separate returns, half of any advance credit is allocated to each spouse if the
qualified health plan covered both spouses. However, if the plan covered only one of the spouses, all
of the advance payments are allocated to that spouse. Because no credit is allowed, generally, on a
separate return, each spouse will have an overpayment that must be repaid. Each spouse is allowed
to use the repayment limitation based on his or her income as it relates to the poverty line."

So, I think this answers your question.

[tpnl]

Thanks

How can I persuade you to reveal your source?

[Burke]

He can send you a PM via this forum. (Private Message).

[tpnl]

I Reread the Instructions for Form 8962

I missed it in my earlier reading because I was looking for the entire APTC to be paid back. The instructions state to split the APTC between the tax families if the APTC covers more than one tax family.

Kerrie