Yes, I'm playing devil's advocate on this post, but hear me out, as I think there's a planning opportunity here. I realize that there could be some sort of substance over form issue, but the Regs seem to make this too easy not to consider.
Family of Mom, Dad, Son 1, Son 2.
All 4 covered under the same ACA policy. Did not receive a credit due to the anticipation of being over 400% of the FPL.
Son gets married in the spring, files his own return. Son and new spouse are not over 400% of the FPL.
Common sense says that I should allocate 25% of the 1095-A to Son 1 to claim on his tax return, and 75% on parents' return. Turns out, this is one of the option. However, §1.36B-4 seems to indicate there is another option though:
https://www.law.cornell.edu/cfr/text/26/1.36B-4
§1.36B-4(a)(1)(ii)(B)(2) reads:
- Code: Select all
(2) Allocation percentage. The enrolling taxpayer and claiming taxpayer may agree on any allocation percentage between zero and one hundred percent. If the enrolling taxpayer and claiming taxpayer do not agree on an allocation percentage, the percentage is equal to the number of shifting enrollees claimed as a personal exemption deduction by the claiming taxpayer divided by the number of individuals enrolled by the enrolling taxpayer in the same qualified health plan as the shifting enrollee.
Is anyone aware of provisions, other than my good conscience, from procuring the most advantageous allocation possible?