Desktop: Form 8962 Shared Policy Allocation Examples

A married couple filing MFJ have a child they are not claiming as a dependent, and all three were covered under marketplace insurance all year. The parents are taking full responsibility for the policy, so the policy amounts will be allocated entirely to the parents.

• Policy Number: 123456789
• Parents primary taxpayer SSN: 405-00-1111
• Child taxpayer SSN: 405-00-2222

Both the parents and the child will include Form 8962 in their tax return with shared policy allocation information entered in Part IV. If both returns are being prepared in TaxSlayer Pro, here's how the allocation information will be entered in Allocation #1 in each return:

Note that in each individual's allocation, all the information in the allocation window is their information except for the SSN, which is the other individual who they are sharing with.

How will Form 1095-A monthly information be entered into Form 8962 Part II in each return?

• Parents - Since the parents' allocation is 100%, the Form 1095-A information will be entered for each month, just as it is on the form, since ${form amount} x 100% = ${form amount}.
• Child - Since the child's allocation is 0%, the Form 1095-A information isn't entered and no further entry work is needed, since ${form amount} x 0% = $0.

What if all they cannot agree on the allocation percentages? If the parents and child cannot agree on the percentages, then they must divide the total allocation of 100% proportionally by the number of covered individuals in their household. In this example, the parents allocation would be two-thirds (67%) while the child's allocation would be one-third (33%).

A parent taxpayer is filing single, or two parents are married and filing jointly, and have two children both filing their own tax returns. The parent(s) is enrolled in a marketplace insurance policy covering everyone. The children have agreed to each be responsible for one-fourth of the policy, while the parent(s) is taking responsibility for half the policy.

• Policy Number: 123456789
• Parent taxpayer SSN: 405-00-1111
• Child taxpayer A SSN: 405-00-2222
• Child taxpayer B SSN: 405-00-3333

Each individual needs a copy of Form 1095-A to use to complete Form 8962 in their respective tax returns, and each will complete Part IV Allocation #1 as follows:

Note that in each individual's allocation, all the information in the allocation window is their information except for the SSN, which is the other individual who they are sharing with.

Note that the parent entered Child A's SSN as the taxpayer sharing the policy, but Child B's SSN could have been entered instead - either will work.

How will Form 1095-A monthly information be entered into Form 8962 Part II in each return?

• Parent - For the amount in each month and column, multiply the amount by 50% and enter the result.
• Child A and Child B - For the amount in each month and column, multiply the amount by 25% and enter the result.

What if all the individuals cannot agree on the allocation percentages? If the individuals cannot agree on the percentages, then they must divide the total allocation of 100% proportionally by the number of covered individuals in their household. In this example:

• if the taxpayer is unmarried and filing Single, then the allocations will be divided three ways, with two of the returns using 33% and one using 34%.
• If the taxpayer is married and filing MFJ, then the taxpayer will use two-fourths (50%) while the children will use one-fourth each (25%).

This scenario is the same as in Example 2 but Child B gets a new job in July and signs up with the employer's health insurance plan. Thus, the parent discontinues Child B's coverage on the marketplace insurance plan in July and chooses to take responsibility for three-fourths of the policy for the remaining five months of the year.

Allocation #1 will look like this on each tax return:

The parent's return will need to include a second allocation to account for the months of the year in which their overall percentage changed:

How will Form 1095-A monthly information be entered into Form 8962 Part II in each return?

• Parent - For the amount in each month and column from January to July, multiply the amount by 50% and enter the result. For the amount in each month and column from August to December, multiply the amount by 75% and enter the result.
• Child A - For the amount in each month and column, multiply the amount by 25% and enter the result.
• Child B - For the amount in each month and column from January to July, multiply the amount by 25% and enter the result. (August to December will be $0 since they weren't covered under marketplace insurance during those months.)

Two taxpayers A and B were married and on marketplace insurance all year, but before the end of the year they were either legally separated or divorced. Their respective tax returns will each include Form 8962 and each will complete Part IV. They will allocate based on the percentages they agree upon between themselves, however if they cannot agree on a percentage then they must each use 50%.

• Policy Number: 123456789
• Taxpayer A SSN: 405-00-1111
• Taxpayer B SSN: 405-00-2222

In this example the taxpayers agree to use 50%. In each individual's allocation, all the information in the allocation window is their information except for the SSN, which is the other individual who they are sharing with.

How will Form 1095-A monthly information be entered into Form 8962 Part II in each return?

For each taxpayer, for the amount in each month and column multiply the amount by 50% and enter the result. If they had agreed on different percentages between them, then you would multiply the amount in each month and column by those percentages.