Health Insurance Information on Your Taxes

[havaneselover]

So the IRS hasn't approved my return after 39 days and I finally found out why. I claim my kids (my ex and I agreed to this in our settlement agreement and I have physical custody of them) but he provides health insurance (this represented probably 80% of his financial contribution to covering the children--he doesn't pay any child support). My insurance is through my employer. It looks like his is through the marketplace and he got advance payments of the premium tax credit. So I have to figure out how the heck to reconcile this and I have no clue. I guess I need his form 1095-A but I'm not sure. This seems like a big fiasco that tangles my taxes with his. Any insight would be greatly appreciated

 

[Shanti]

So the IRS hasn't approved my return after 39 days and I finally found out why. I claim my kids (my ex and I agreed to this in our settlement agreement and I have physical custody of them) but he provides health insurance (this represented probably 80% of his financial contribution to covering the children--he doesn't pay any child support). My insurance is through my employer. It looks like his is through the marketplace and he got advance payments of the premium tax credit. So I have to figure out how the heck to reconcile this and I have no clue. I guess I need his form 1095-A but I'm not sure. This seems like a big fiasco that tangles my taxes with his. Any insight would be greatly appreciated

Yikes! I just filed & have a similar family situation. Hope my return doesn't get held up, too. I recommend contacting the IRS's Taxpayer Advocate Service.

 

[havaneselover]

Yikes! I just filed & have a similar family situation. Hope my return doesn't get held up, too. I recommend contacting the IRS's Taxpayer Advocate Service.

Hopefully yours goes through without a glitch!

This is somewhat complicated. I'm on hold with the IRS. Talked to my ex and he had a subsidized family plan for about four months. He's sending me his 1095-A so I can fill out Form 8962. But I'm not sure if the subsidy for the kids is lost if it's based on my income (or if he shouldn't have been able to get it at all) and if so who gets stuck with that bill.

 

[happily single]

I had the same thing happen to me (filed 1/31. Submitted the forms last week and still not processed). Just a word of caution, you may need a form 1095-b as well.

 

[havaneselover]

I had the same thing happen to me (filed 1/31. Submitted the forms last week and still not processed). Just a word of caution, you may need a form 1095-b as well.

So when I fill out form 8962 it's holding me responsible for 100% of their subsidy. I'm so lost. I seriously am about to cry. Being a single mom sucks sometimes.

 

[supersnoop]

This is a strange and interesting situation. It seems as though only the custodial parent can qualify for the subsidy. In order for your ex to qualify, you'd have to provide a Form 8332, releasing your ability to claim an exemption for the child. From the IRS's perspective, the custodial parent is required to provide coverage, so, any subsidy would be your responsibility. If you don't qualify, you're the one who has to pay it back.

There may be much more to it than that, but I imagine this is going to end up with your lawyers talking to each other. Your ex might have lied on the ACA paperwork to qualify for the subsidy, so you should have some leverage.

 

[havaneselover]

This is a strange and interesting situation. It seems as though only the custodial parent can qualify for the subsidy. In order for your ex to qualify, you'd have to provide a Form 8332, releasing your ability to claim an exemption for the child. From the IRS's perspective, the custodial parent is required to provide coverage, so, any subsidy would be your responsibility. If you don't qualify, you're the one who has to pay it back.

There may be much more to it than that, but I imagine this is going to end up with your lawyers talking to each other. Your ex might have lied on the ACA paperwork to qualify for the subsidy, so you should have some leverage.

But the subsidy covered him and his wife as well. How can they hold me responsible for 100% of the subsidy he received?

 

[supersnoop]

But the subsidy covered him and his wife as well. How can they hold me responsible for 100% of the subsidy he received?

I know there are some "injured spouse" provisions in the tax law, but I doubt any apply to this situation. I imagine you'll need an experienced tax preparer and a lawyer to resolve this issue.

Between you and the IRS, you're required to provide health insurance coverage. Between you and your ex, he's supposed to. So, he created a problem between you and him, and between you and the IRS.

I imagine he'll have to repay the subsidy when he files his taxes. Here's a good article describing the difference between "family size," dependents," and "personal exemptions." He probably used the wrong number when he applied for coverage.

http://insuremekevin.com/aca-households-dependents-exemptions-confusion/

 

[havaneselover]

I know there are some "injured spouse" provisions in the tax law, but I doubt any apply to this situation. I imagine you'll need an experienced tax preparer and a lawyer to resolve this issue.

Between you and the IRS, you're required to provide health insurance coverage. Between you and your ex, he's supposed to. So, he created a problem between you and him, and between you and the IRS.

I imagine he'll have to repay the subsidy when he files his taxes. Here's a good article describing the difference between "family size," dependents," and "personal exemptions." He probably used the wrong number when he applied for coverage.

http://insuremekevin.com/aca-households-dependents-exemptions-confusion/

Thanks. I've talked to him and he's being very reasonable and will try to contact his accountant tomorrow. There's nothing I can do tonight.

 

[supersnoop]

Thanks. I've talked to him and he's being very reasonable and will try to contact his accountant tomorrow. There's nothing I can do tonight.

He qualified for a subsidy, and he has an accountant???

 

[havaneselover]

He qualified for a subsidy, and he has an accountant???

He is self-employed. He had a good-sized business which he lost right after our divorce (which is why he hasn't been able to pay any child support). This accountant was his business accountant. He started another business and I guess when he was trying to get it off the ground, he was making so little that he qualified for five months.

 

[havaneselover]

After about an hour on hold someone at the IRS told me on form 8962 I have to allocate everything to my ex. I let him know that I did that and faxed everything back. Hopefully I'm done. What a pain!

 

[Melissa Petsel]

I'm divorce and have insurance through the marketplace but I am the custodial parent. The way I understand the tax laws is whoever has coverage via marketplace (your ex) AND gets the subsidy (your ex) is the one that has to claim them on their tax return. I have let my ex claim my daughter in previous years, but I can't anymore because then I would lose the subsidy for the marketplace insurance.

When you originally fill out the marketplace application, it asks you if you will be claiming your dependents on your tax return - it must have told them yes. He could have still gotten the insurance but just not the subsidy.

 

[havaneselover]

I'm divorce and have insurance through the marketplace but I am the custodial parent. The way I understand the tax laws is whoever has coverage via marketplace (your ex) AND gets the subsidy (your ex) is the one that has to claim them on their tax return. I have let my ex claim my daughter in previous years, but I can't anymore because then I would lose the subsidy for the marketplace insurance.

When you originally fill out the marketplace application, it asks you if you will be claiming your dependents on your tax return - it must have told them yes. He could have still gotten the insurance but just not the subsidy.

He should not have claimed the subsidy and I had the right to claim them. I have physical custody (they're with me about two-thirds of the time), provided more than 50% of their financial support, and have it written in the settlement agreement that I claim them. And he only had the subsidy for five months. The way I understand it is only the parent who can claim them can get the subsidy.

I am responsible for making sure they are covered. He is required to cover them legally but if he hadn't I would have been penalized. I had no clue they were getting ACA coverage.

I'm not sure why they would have said they were claiming the kids. He did approach me Recently about claiming one of them but I told him no. But I've always claimed them.