Form 8962 and tax family size

[Joe Blue]

I obtained marketplace insurance for 2018 and indicated a family size of 4. The advanced premium tax credits that I received were based on a family of 4. Now I have 2 sons and it turns out that they must each file their own return. I understand that I can allocate their premium credits onto my return when we all file 8962, but I have been told that I can only write 2 for my tax family size on line 1, because they are not included on my return. This will greatly change the premium credit calculations on lines 2-8, because they are based on the family size entered on line 1. How do I fill out the forms so that I can claim all the premium credit on my return, and use a family size of 4, which is the true size of my insurance family?

 

[LdiJ]

I obtained marketplace insurance for 2018 and indicated a family size of 4. The advanced premium tax credits that I received were based on a family of 4. Now I have 2 sons and it turns out that they must each file their own return. I understand that I can allocate their premium credits onto my return when we all file 8692, but I have been told that I can only write 2 for my tax family size on line 1, because they are not included on my return. This will greatly change the premium credit calculations on lines 2-8, because they are based on the family size entered on line 1. How do I fill out the forms so that I can claim all the premium credit on my return, and use a family size of 4, which is the true size of my insurance family?

You fill out the Shared Policy Allocation section of the form. That will establish the other insurance family members.

 

[Joe Blue]

You fill out the Shared Policy Allocation section of the form. That will establish the other insurance family members.

Yes, I understand how to allocate the premiums using Part IV of the form. But I need to use a family size of 4 on line 1. Is this permissible since each child will claim 0 as their family size?

 

[LdiJ]

Yes, I understand how to allocate the premiums using Part IV of the form. But I need to use a family size of 4 on line 1. Is this permissible since each child will claim 0 as their family size?

Are you filling out the forms by hand? If not, allocating the premiums should automatically fill in the proper number on line 1. If you are filling them out by hand then I believe that yes, you would want to put 4 on line 1. The instructions for line 1 are a bit murky, so I do understand why you are asking.

 

[Joe Blue]

Are you filling out the forms by hand? If not, allocating the premiums should automatically fill in the proper number on line 1. If you are filling them out by hand then I believe that yes, you would want to put 4 on line 1. The instructions for line 1 are a bit murky, so I do understand why you are asking.

Yes, I am filling out the forms by hand. Glad you say the instructions are murky. They tell the person taking 0% to write 0 for family size; the instructions should also tell the person taking the 100% to add in each person to their family size. This is the only way the computations on lines 2-8 make any sense. (I am also planning to add in my 2 sons incomes on line 2b even though they are not on my return. This makes line 5 accurate.)

 

[LdiJ]

Yes, I am filling out the forms by hand. Glad you say the instructions are murky. They tell the person taking 0% to write 0 for family size; the instructions should also tell the person taking the 100% to add in each person to their family size. This is the only way the computations on lines 2-8 make any sense. (I am also planning to add in my 2 sons incomes on line 2b even though they are not on my return. This makes line 5 accurate.)

The bolded is what you are supposed to do.

 

[Joe Blue]

The bolded is what you are supposed to do.

Yes, it makes sense to do this. Do you have any place where the IRS says I can, in my situation, use a family size of 4 on line 1? This is the only way I can make sense of the whole mess. Thanks, LdiJ for your thoughts!