Question

Interview Notes • Sandra Clark is 45 years old. • Sandra works as a clerk and earned $27,500 in 2019. • Sandra's daughter, Debbie, is 26 years old and she is not disabled. • Debbie lived with Sandra as a member of her household for all of 2019. • Debbie works as a receptionist and earned $18,250 in 2019. • Sandra purchased health insurance coverage for herself and Debbie on the same policy from the Marketplace for all of 2019. • Sandra received Form 1095-A from the Marketplace showing that she and Debbie are both covered individuals for all of 2019. 8. Can Sandra claim Debbie as a qualifying relative on her 2019 return? a. Yes, because Debbie lived with Sandra as a member of her household for all of 2019. b. No, because Debbie had gross income of more than $4,200 during the tax year. 9. Which of the following statements is true regarding the Form 1095-A? A. Both Sandra and Debbie can claim the entire amount of the premium tax credit since both of their names are shown on Form 1095-A as covered individuals. B. Sandra should reconcile the entire premium tax credit information from her Form 1095-A on her tax return. C. Debbie should reconcile the entire premium tax credit information from Sandra's Form 1095-A on her tax return. D. Sandra and Debbie have a shared policy. Information on the Form 1095-A must be allocated between their two tax returns. Both of their returns are out of scope.

Answer 1

Answer:

Option B is correct “No, because Debbie had gross income of more than $4,200 during the tax year”

The qualifying relative means the person who meet the five requirements of IRS i.e.

1. The person need to be the citizen of Canada, US or Mexico or the alien resident of US.
2. Person should not be the qualifying child.
3. The individual need to be the relative of taxpayer for complete year and have relationship with taxpayer either by donation or blood.
4. The individual should have less than $4,200 gross income in 2019.
5. Taxpayer is supporting higher than half expense of the person.

Since, the gross income of Debbie is $18,250 and thus she is not the qualifying relative.

Part (2)

Option D is correct “Sandra and Debbie have a shared policy. Information on the Form 1095-A must be allocated between their two tax returns. Both of their returns are out of scope”

Form 1095A means the form sent from the provider of health insurance to the taxpayer that has received the coverage of health insurance. Since Debbie and Sandra are both earning and thus the premium will be allocated between them from Form 1095A and will be out of scope.