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Family Law and Affordable Care Act Tax Issues

Authored By: Northwest Justice Project LSC Funded

5718EN - This publication provides general information about how factors such as tax filing status, child custody, and changes in family composition may impact your health insurance coverage and taxes.

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Information

Introduction

The Affordable Care Act ("ACA") could affect your tax return this year, especially if

  • you did not have health insurance for all or part of the year OR

  • if you received a subsidy to help pay your insurance premium

This publication provides general information about how factors such as tax filing status, child custody, and changes in family composition may impact your health insurance coverage and taxes.

How does the IRS determine my marital status for tax filing purposes?

Under IRS rules, your marital status is determined by whether you were single, married, legally separated, or divorced on the last day of the calendar year. 

I am married.  Do I have to file my taxes as "married, filing jointly" to be eligible for Premium Tax Credits to help with the costs of my health insurance?

Most people who are legally married must file as "married filing jointly" to be eligible for Premium Tax Credits to help pay for their insurance premiums.  Our publication Taxes and the Affordable Care Act- Premium Tax Credit has more information.   

There are some exceptions to this general rule. We discuss them below. 

I am a domestic violence survivor. I cannot file taxes jointly with my spouse.  What should I do?

You may be eligible for the domestic violence exception to the joint filing requirement for Premium Tax Credits. You must show:

  • you live apart from your spouse at the time you file your return

AND

  • you are a survivor of domestic violence

You may claim this exception for a maximum of three years. 

My spouse left and I cannot find him/her.  What should I do?

You may be eligible for an "abandoned spouse" exception to the joint filing requirement for Premium Tax Credits. You must show:

  • you live apart from your spouse at the time you file your tax return

AND

  • you have been unable to find him/her after making reasonable efforts to do so  

You may claim this exception for a maximum of three years.

I lived apart from my spouse for the last part of the year.  Do I have to file jointly with my spouse to get Premium Tax Credits?

If you lived apart from your spouse for the last six months of the tax year, you may be eligible to file as "Head of Household" and exempt from the joint filing requirement for Premium Tax Credit.  You must show:

  • You paid more than half the costs of keeping up the home during the tax year

AND

  • You provided the main home for a child, stepchild, or foster child for more than six months of the year

If you are married and meet the "Head of Household" filing requirements, you can file as "married, filing separately" and still be eligible for Premium Tax Credits.  Your spouse will be treated as married and will not be eligible for Premium Tax Credits, since you filed separately. (S/he may be eligible for the "Head of Household" exception, if s/he provided a home for different children than the ones you include on your tax returns.) 

My marital status changed during the tax year.  What filing status should I use?

If you got married or divorced after you purchased a QHP, you must report your change in marital status to Healthplanfinder.  Changes in marital status, household size, and income may affect the amount of your Premium Tax Credit.  If you do not report changes when they happen, you may end up owing money (or be owed money) when you reconcile your tax credits on your tax return.

My spouse died during the tax year. What filing status should I use? 

You are considered married for the entire tax year and IRS allows you to file jointly or separately from your deceased spouse.  To claim Premium Tax Credits, you must file as "married, filing jointly."

I am legally married to my same sex spouse.  Can I file as married and claim Premium Tax Credits?

Yes, if you live in Washington state.  The IRS will recognize your marriage for federal income tax purposes because your marriage is legally valid in Washington state. 

Do I have to get health insurance for everyone in my family?

Probably.  The ACA requires you, your spouse, and your dependents to have qualifying health insurance for the entire year, unless you are eligible for an exemption. See our publication Tax Issues for Immigrants under the Affordable Care Act

Can I get Premium Tax Credits for my child?

Yes, so long as you qualify to claim the child as a dependent on your tax return.  In order for you to claim a child as a dependent on your tax return, all of these be true:

  • The child is a citizen or resident of the U.S., Canada, or Mexico (note: eligibility for tax credits is limited to U.S. citizens and lawfully present immigrants)

  • The child lived with you at least half the year

  • The child was under age 19 by the end of the tax year (or under age 24 if a full-time student, or any age if disabled)

  • The child has a qualifying relationship to you (can be your child, grandchild, younger sibling, or younger niece or nephew)

  • The child is not paying more than half of his own support (if the child does pay more than half, s/he may qualify as another type of dependent)

I do not have custody of my children. Will I have to pay a tax penalty if they are not insured?

The parent who qualifies to claim the child as a dependent on his/her tax return faces a tax penalty if the child is not covered.  Normally this would be the custodial parent with whom the child lives most of the time during the tax year.  If the custodial parent signs IRS form 8332 allowing the non-custodial parent to claim the child as a dependent, the non-custodial parent can get Premium Tax Credits for the child and may face a tax penalty if the child is not insured. 

I have custody of my children. The other parent is required to provide health insurance under a child support order but has not done so. Will I face a penalty?

If your child has been denied Washington Apple Health and the other parent is required by court order to provide health insurance for the child, you may qualify for a hardship exemption. 

5718EN

This publication provides general information concerning your rights and responsibilities. It is not a substitute for specific legal advice.
This information is current as of January 2017.
© 2017 Northwest Justice Project — 1-888-201-1014.

(Permission for copying and distribution granted to the Alliance for Equal Justice and to individuals for non-commercial use only.)

Last Review and Update: Jan 26, 2017
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