Allocating PTC to Shifting Enrollee

Technical topics regarding tax preparation.
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I wanted to run this by you to see if anyone thinks I might be missing something. My clients, husband and wife, have a a family and received advance premium tax credit payments for their policy on the healthcare exchange during 2017. They have a business that was very profitable in 2017 and their 2017 income exceeds 400% of the federal poverty level, so ordinarily under these circumstances they would be required to repay the entire credit. However, one of their dependent children, who they believed would remain a dependent when they renewed their exchange healthcare policy in 2016, decided to marry in 2017 and consequently does not meet the dependent criteria for 2017 even though the child was covered in the parents' exchange policy. Under Regs. 1-36B-4(a)(1)(ii)(B)(2) and 1-36B-4(a)(1)(ii)(B)(4), the taxpayer who originally enrolled the child in the policy (the parents) and the person who ultimately claims the personal exemption (the child herself who claims her own exemption on a married filing joint return with her new husband) may agree on any allocation percentage between 0 and 100 percent to allocate the premiums and advance credit between them. Since the child and her husband have much lower income than the parents, it seems to me that in this case they should agree to allocate 99% of the premiums to the child, so that the child's repayment of the advance PTC will be capped at $600 and the parents will only have to repay 1% of the advance PTC. Of course, this means allocating the premiums for the entire family to the one child even though that child did not pay the premiums for the whole family (or even for herself, for that matter), but the regs seem pretty clear that they "may agree on any allocation percentage between zero and one hundred percent."
 

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