Hello
My daughter will turn 26 on October 30. She is in professional school for 2 more years. I have always claimed her. She will need health insurance beginning October 30.
If I claim her I assume she is not eligible for medicare?
Do the benefits of claiming her outweigh the costs?
Any help would be appreciated.
MDM's response is excellent, as always.
The key thing to realize is that there are rules for whether someone can be claimed, and they're usually reasonably straightforward to understand and apply. What you should do is apply those rules to determine whether or not to claim her; you should not base the claiming decision on which results in a better outcome.
Since she is 26, I don't believe she is eligible for Medicare, which starts at age 65. If you mean Medicaid - which you probably do - then whether she is eligible depends on multiple things. First would be to determine whether or not she is your dependent - if she is, then she's probably not eligible unless you're also eligible. Second, if she's not a dependent, then it depends on her income, her state of residency, and possibly some other things depending on whether she lives in a Medicaid-expansion state or not.
It's tricky to figure out the best thing to do. I'm in somewhat similar shoes with three offspring who may or may not be my dependents in any given year depending on the facts and circumstances. Especially with health insurance and family size and income levels for ACA (ACA subsidies depend on family size which in turn depends on whether offspring are dependents or not). In addition to healthcare and healthcare subsidies, it can affect filing status (I file single or HOH depending on dependent status) which affects tax brackets. Also of note is this year, young adults like your DD would probably qualify for the $1200 corona virus tax credit on her upcoming tax return, but only if she is not claimed as a dependent on your return.