ACA 1095-A Shared Responsibility Allocation for family with adult kids - how to handle it?

I'm working with a client's return and experiencing a headache trying to figure out the correct allocation for a family health plan on the ACA Marketplace. The situation has me second-guessing myself even though it seems like it should be straightforward. The parents want their two adult children (both under 26 but not dependents) to get their own insurance policies going forward. For the current tax year, we're looking at how to handle the shared allocation on the 1095-A. Right now, we're trying to allocate 100% to the parents and 0% to the children. The family has 4 people total on the policy. Parents' income is about $145K. Monthly premiums on the 1095-A (Column A) are $1625 for the whole family. The SLCSP (Column B) shows $2245/month for all 4 family members. But according to the instructions we've been reading, we might need to reduce this to just the two people in the tax family (the parents), which would be around $1440/month. With the higher SLCSP amount, the Premium Tax Credit (PTC) calculates to about $14,400, which seems extremely high given their income level. Using the lower SLCSP figure, we get a PTC of around $5,600, which feels more realistic. Can someone please advise on how the shared allocation worksheet should be completed in this scenario? Also, what should the adult children's returns look like to properly correspond with the parents' return? Really hoping someone with ACA expertise can weigh in! Thanks so much!

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19 comments

Freya Johansen

•8M

Hey there! I work with ACA-related returns regularly, and the shared allocation can definitely be tricky. Let me try to clarify this for you. When you have individuals on a policy who aren't part of the tax family (like your adult non-dependent children), you need to allocate the policy elements appropriately. The key is understanding that the SLCSP (Column B) amount should indeed be adjusted to reflect only the taxpayers who are claiming the PTC. In your case, you're correct that you should use the lower SLCSP amount that covers just the parents ($1440/month). Using the full family SLCSP when calculating the parents' PTC would be incorrect because it would give them credit for coverage costs associated with individuals not in their tax family. For the allocation worksheet: - Parents claim 100% of their share of premiums and SLCSP - Parents claim 0% of the children's share - The children would complete their own Form 8962, claiming 100% of their respective shares This approach should give you the more reasonable PTC amount you calculated (around $5,600).

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CosmosCaptain

•8M

Thank you for this explanation! I thought I was on the right track, but wanted to confirm. So just to be clear - the lower SLCSP amount is the correct one to use here. Do the adult children need to file Form 8962 on their returns even though they're not claiming any portion of the PTC since the parents are taking 100% of their (the parents') allocation? Or do the children need to somehow indicate on their returns that they were covered but are not claiming any credits?

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Freya Johansen

•8M

The lower SLCSP amount is definitely the correct one to use for the parents' portion, as it represents the benchmark plan cost for just the two individuals in their tax family. The adult children wouldn't need to file Form 8962 if they're not claiming any portion of the PTC. Since the parents are taking 100% of their own share (not the children's share), and the children are taking 0% of the parents' share, there's nothing for the children to report regarding the PTC. The children would only need to indicate on their returns that they had minimum essential coverage for the year to satisfy the shared responsibility requirement. This is typically done by checking a box on Form 1040. They don't need to file any additional forms related to the marketplace coverage if they're not claiming any portion of the premium tax credit.

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Omar Fawzi

•8M

I dealt with this exact same situation with my parents' tax return last year and was totally confused until I used taxr.ai to analyze our 1095-A and allocation situation. I uploaded our tax documents and forms to https://taxr.ai and it immediately identified that we were incorrectly calculating the SLCSP amount for a split family situation. The tool confirmed what the previous commenter said - you need to use the SLCSP amount that corresponds ONLY to the individuals in the tax family claiming the credit. The software walked me through exactly how to allocate the percentages on the shared policy allocation worksheet and showed how to properly adjust the SLCSP figure. It also provided a step-by-step guide for both my parents' return and my own, making sure everything matched up correctly between them. Saved me a ton of headache and probably prevented an audit!

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Omar Fawzi

•8M

The 1095-A does only show one SLCSP amount for the whole policy, which is exactly why this gets confusing! The tool walks you through finding the correct SLCSP values using the government's lookup tool based on the location, ages of just the taxpayers claiming the credit, and coverage month. It provided direct links to the state's SLCSP tables where needed. As for how the system determines the proper allocation, it uses the marketplace guidelines for age-based premium calculations. The tool basically recalculates what the SLCSP would be for just the individuals in the tax family (in this case, just the parents). It's not a simple 50/50 split because premium costs vary by age, so it does the proper weighted calculation.

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Diego Mendoza

•8M

I have to share my experience after trying taxr.ai based on the recommendation here. I was having the EXACT same issue with my family's 1095-A and premium tax credit calculation because my 24-year-old daughter was on our policy but filing her own return. Their analysis caught that I was using the wrong SLCSP figure and identified that I needed to use the specific lookup tool for my state to find the correct benchmark plan amount for just my spouse and me. The difference was significant - almost $4000 in PTC! The best part was that it gave me a detailed explanation document that I could save with my tax records explaining exactly how and why the allocation was done this way. It even showed side-by-side comparisons of the correct vs. incorrect methods. If I ever get questioned by the IRS, I have clear documentation of why we calculated it this way.

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Anastasia Romanov

•8M

I see you're struggling with ACA forms - I've been there! After waiting for HOURS on hold with the IRS's ACA hotline trying to get clarification on a similar allocation issue, I discovered Claimyr and it was a game-changer. I used https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c to see how it works. They got me on the phone with an actual IRS ACA specialist in under 15 minutes after I'd been trying for DAYS on my own. The agent walked me through the exact allocation process for my family's situation (which sounds similar to yours with adult children on the policy). The IRS agent confirmed that when adult non-dependent children are on the same policy, you absolutely must adjust the SLCSP to reflect only the taxpayers claiming the credit. They even emailed me documentation backing this up so I had it for my records.

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Anastasia Romanov

•8M

They don't have a special line to the IRS, but they use a sophisticated system that navigates the IRS phone tree and waits on hold for you. When an agent finally picks up, you get a call connecting you directly. It's completely legitimate. The service basically does the waiting for you. Instead of you sitting on hold for 2+ hours, their system does it, and then calls you when an actual human at the IRS picks up. I was skeptical too until I tried it, but when I got connected to an ACA specialist who actually understood my complex allocation question, it was worth every penny.

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Sean Kelly

•8M

I need to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it myself because I was desperate to resolve my own 1095-A allocation issue before filing deadline. It actually worked exactly as described. I got a call back in about 35 minutes with an IRS agent on the line who specialized in Premium Tax Credit calculations. I explained my situation (very similar to yours with adult children on the family plan), and she confirmed: 1) You must use the SLCSP amount for ONLY the taxpayers who are claiming the credit 2) The allocation worksheet should show parents claiming 100% of their portion and 0% of the adult children's portion 3) The children don't need to file Form 8962 if they're not claiming any PTC She even sent me a follow-up email with IRS documentation on the correct way to handle the allocation. Honestly, I'm still shocked at how well it worked after struggling for weeks to get a straight answer.

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Zara Malik

•8M

The alternative calculation isn't directly applicable to your non-marriage situation - I should have been clearer about that. I merely suggested it as a way to understand the underlying calculation methodology. What you actually need to do is use the marketplace's SLCSP lookup tool for your state to find the correct benchmark amount for just the two parents. Each state has slightly different tools, but they all allow you to input ages, county of residence, and coverage months to get the precise SLCSP amount for just the taxpayers claiming the credit. Most tax professionals overlook this step and just use the amount on the 1095-A, which is incorrect for split family situations.

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Isabella Santos

•4M

This is such a common issue that trips up many tax preparers! I want to emphasize something that hasn't been fully clarified yet - when you allocate 100% to the parents and 0% to the adult children, you're not just doing this for the premium amounts, but also for the advance premium tax credit (APTC) amounts shown in Column C of the 1095-A. The key steps are: 1) Use the state's SLCSP lookup tool to find the benchmark plan cost for JUST the parents (not the full family amount shown on the 1095-A) 2) Calculate the parents' PTC using their income and the adjusted SLCSP amount 3) Complete the allocation worksheet showing parents claim 100% of their portions 4) The adult children simply report they had coverage but don't file Form 8962 One thing to watch out for - make sure you're using the correct ages for the SLCSP lookup. Use the ages as of the first day of each coverage month, not current ages. This can make a difference in the benchmark calculation. Your instinct about the $5,600 PTC being more reasonable than $14,400 is absolutely correct. The higher amount would only make sense if you were calculating credits for all four family members, which isn't appropriate here since the adult children aren't in the parents' tax family.

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