Not filing jointly, but CPA says can still get subsidies

[yankee466]

Had an existing married subsidized ACA client call me today to discuss reporting an income increase for this year. He starting talking about his CPA deciding whether they should file jointly or separately......which immediately caused me to say "no joint file....not eligible for subsidy"

Client went back to CPA who said "not true...there is an IRS loophole that allows this"......and they were told to tell HC.gov they would file jointly, but when the time comes, not required to do so. Odd that if you say "NO" to joint file, it does not allow a subsidy.

I'm not going to argue with a CPA on tax laws, but I find it odd. Any comments, or am I missing something? I've only been doing this since ACA started. It matters not to me at the end of the day....other than the perjury statement that the client is agreeing to...so its technically their problem, not mine.

 

[Yagents]

It's on the CPA, but there are exceptions

Who’s included in your household | HealthCare.gov

Find out if you qualify for lower costs on Marketplace health insurance coverage at HealthCare.gov.

www.healthcare.gov

my spouse and I have to file taxes jointly to get Marketplace savings?

Yes, with certain exceptions.

• If you're married and will file a joint federal tax return for the year you want coverage: You're eligible for a premium tax credit and other savings if you qualify based on your income and other factors.
• If you're married and will file separately for the year you want coverage: You can enroll in a Marketplace plan together but you're not eligible for a premium tax credit or other savings, and you may have to complete a separate application.
• If you're married and plan to file as head of household for the year you want coverage: You can say you're married, and won't file a joint return, on your Marketplace application. If you meet other criteria, like living separately from your spouse, we'll then ask if you're planning to file as head of household. You're eligible for a premium tax credit and other savings if you're planning to file as head of household and you qualify based on your income and other factors. See IRS rules for filing as head of household.
• See the next question for an exception for victims of domestic abuse and spousal abandonmen

Do I have to file federal taxes and apply for insurance with my spouse if I'm a victim of domestic abuse, domestic violence, or spousal abandonment?

No, you don't have to file jointly — and you can still qualify for a premium tax credit and other savings.
If you're living apart from your spouse and are a victim of domestic abuse, domestic violence, or spousal abandonment and want to enroll in your own health plan separate from you abuser or abandoner, you can say you're "unmarried" on your Marketplace application without fear of penalty for mis-stating your marital status.
This will let you (and possibly your dependents) qualify for premium tax credits and other savings based on your income.

Married Filing Separately

If you are married and you file your tax return using the filing status married filing separately, you will not be eligible for the premium tax credit unless you are a victim of domestic abuse and spousal abandonment and can meet certain criteria. Details regarding this relief are in the instructions for Form 8962 and Publication 974.

Generally, a taxpayer who lives apart from his or her spouse for the last six months of the tax year is considered unmarried if the taxpayer files a separate return, maintains a household that is also the main home of the taxpayer's dependent child for more than half the year, and furnishes more than half the cost of the household during the tax year.

Eligibility for the Premium Tax Credit | Internal Revenue Service

Eligibility for the Premium Tax Credit

www.irs.gov

 

[yankee466]

Thanks.....Exactly what I told them.....nothing new here. None of those exceptions apply to them.

Like I said before...not my problem. The CPA can work with them and the IRS.

 

[adjusterjack]

Next year they will have a penalty and the CPA will have a convenient loss of memory.

 

[Special Agent]

Had an existing married subsidized ACA client call me today to discuss reporting an income increase for this year. He starting talking about his CPA deciding whether they should file jointly or separately......which immediately caused me to say "no joint file....not eligible for subsidy"

Client went back to CPA who said "not true...there is an IRS loophole that allows this"......and they were told to tell HC.gov they would file jointly, but when the time comes, not required to do so. Odd that if you say "NO" to joint file, it does not allow a subsidy.

I'm not going to argue with a CPA on tax laws, but I find it odd. Any comments, or am I missing something? I've only been doing this since ACA started. It matters not to me at the end of the day....other than the perjury statement that the client is agreeing to...so its technically their problem, not mine.

I am currently helping my sister with her 2023 taxes and she got too much subsidy and owes about 5000.00 back but that is capped at 3000.00 because of her income.If she files her taxes as married but filing separate her subsidy repayment cap is reduced to 700.00 based on her income only.This seems to be a loophole based on the reading i have done but then the question what about the subsidies she is getting for 2024.She currently separated and planning on getting a divorce but she put she was married on aca subsidy eligibility form for 2023 and 2024.We are going to see a CPA this week about this.BTW i am not her AOR that advised her on her ACA plan.