Hoping someone can point me to an answer to this question or another thread if already discussed elsewhere.
For FPL purposes, where can one find the definition of "family"? I have two adult children who will be 24 and 23 next year. Their full-time student status is questionable. I may have one that counts as a dependent and one that does not but this is not clear right now. But I may wish to have both of them on our family ACA plan since they are under age 26 and probably won't have full-time jobs yet (that could also change if one of them graduates in May).
I'm trying to figure out if we are a family of 2, 3, or 4 for ACA purposes, as we may both be retiring this year and looking for ACA coverage for 2022.
Anyone with experience with adult children on their ACA plan who are not also dependents for tax purposes?
Thanks!
Your tax family for any given tax year is you, plus your spouse, plus any qualifying children or other dependents.
To determine if your adult children are your qualifying children or other dependents, see the flowcharts in Form 1040 instructions, starting on page 17. Many things are taken into consideration, including relationship, age, student status, disability status, residency, income, and support.
You need to reevaluate your dependents each tax year, since the facts and circumstances change over time. You can use the flowcharts to try to understand ahead of time, for planning purposes, who might be your dependent in 2022.
The odd thing, of course, is that you generally have to try to know ahead of time (during open enrollment and then during they year) whether to include them on your ACA policy or not. It is easiest if you determine correctly ahead of time and make it so that you include on your ACA policy everyone who is your dependent, and exclude everyone who is not your dependent.
If you include one of your children on your ACA policy and then they end up not being your dependent, then you will have to allocate the relevant premium tax credits, subsidy amounts, and SLCSP amounts between your tax return and their tax return. See "Allocation Situation 4" starting on page 18 of the instructions for Form 8962.
If you do not include one of your children on your ACA policy and then they end up being your dependent, then you can include them in your tax family, which will help you with your PTC when you go to file your taxes, but will not help in terms of APTC, CSRs, and most importantly, they would not have been covered under your policy.
You can make your best guess at open enrollment time. If you determine partway through the year that the person will be or will not be your dependent, then you can perhaps contact your state department of health and welfare to add or remove them. They may or may not do so, because usually you have to have a qualifying life event in order to make changes. If they do allow the change, then it will likely result in a reevaluation of your situation, an adjustment to your APTC, and possibly create multiple 1095A forms for you at tax time. It could also affect your insurance OOP, deductibles, and of course insurance coverage for the individual you're adding or removing.
Another option is to treat the questionable individual as their own tax family and have them get an ACA policy on their own. If they end up being their own tax family, then they file their own taxes and do their own 8962, and you and the rest of your tax family file your own taxes and do your own 8962. If they end up being your dependent, then you can just combine their 1095A information with yours on your 8962.