Modifying Household Size

Nov 13, 2015

  1. kstein
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    Is it kosher to not take the child deduction on 2 kids who don't live at home, are in college, and have substantial income, leaving the single parent to qualify for a subsidy? Anyone come across a situation like this?

    Would they still be considered a household of 3?
     
    kstein, Nov 13, 2015
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  2. MBSC
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    If the children's employment provides for more than half of their support, they should not be claimed as a dependent. See IRS Publication 501 for more details.

    For the ACA, they can remain on the parent's plan until age 26, making the household size 3 if they're on the plan but the income from all their tax returns is counted.
     
    Last edited: Nov 14, 2015
    MBSC, Nov 14, 2015
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  3. kstein
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    I see, thanks for the feedback, probably one of those cases to offer off exchange or walk away. Stinks bc the guy is in a tough situation, wife died early, left behind stock for kids which generates their income and the dad is really sick and uninsured.
     
    kstein, Nov 14, 2015
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  4. HammerTime
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    Depends on what "substantial" income means. The kid would likely qualify for a subsidy on their own if it's that substantial.
     
  5. kstein
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    Not a ton, maybe 60k per kid. I think the issue is that the kids don't associate w the dad a ton or the dad is estranged from wife's family. Not too sure
     
    kstein, Nov 14, 2015
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  6. HammerTime
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    60K per year per Kid? No one is going to qualify for a subsidy in that case. Off exchange. As far as the dad still claiming the kids, I think that would be a better question for an accountant.