Health insurance for sibling

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Good evening. 

I am in need of your opinions. My younger brother is 20 and a full time student. He has two jobs but they are both part time. One is Best Buy after school and the other is waitressing at night on saturdays and Sunday's. Neither job offers health for part time. I am an accountant and make about 50,000. I am 24 but he is not considered to the health insurance company at my work as my dependent even through he is my dependent on taxes. He lives with me (he pays about 30% of bills) and I pick up the rest. He has health ins through the affordable care act but I had to forgo claiming him this year because he would not qualify for the ACA if I did. 

I am giving up about 3,000-4,000 in tax money by not claiming him. Does any know of any work around? Any ideas? 

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You 'forgo' $3000 in taxes, but he 'gains' up to $3000 in his own taxes you know.
ACA is the only way to get him insurance as he is over 20 and he's not your 'son'.

BTW you don't have to forgo the dependent clause, but if you want him to get the most 'discount' then you have to.
https://www.healthcare.gov/young-adults/coverage/

monthendclose said:   My younger brother ... has two jobs ... the other is waitressing at night on saturdays and Sunday's. 
  I am intrigued. Please elaborate.

wpgabriel said:   
monthendclose said:   My younger brother ... has two jobs ... the other is waitressing at night on saturdays and Sunday's. 
  I am intrigued. Please elaborate.


http://www.hamburgermarys.com/weho/

 

There is no work around. I also don't see where you get the 3-4k from. 50k salary is 40k taxable income after SD/PE which is 5.8k in taxes. Claiming your brother is 36k taxable income and HOH status making taxes 4.7k in taxes. You are only losing out on 1.1k in taxes. How much is his part time income. If it's more than 6k then he is getting some of the savings you are losing out on his taxes. Only other thing is the 2.5k AOTC. Only 1k is refundable so he's losing out on the other 1.5k if his expenses are high.

So total tax loss is only between 1-2.5k as far as I can tell. Does your brother have any health issues as it may be better to claim him. Claiming him means he doesn't get an ACA subsidy or free Medicaid depending on state but at least here in Nevada a cheap plan for 20 year old is only $100/month without any subsidies. Claiming him may be better financially.

Because I pay for his books and about 4000 in tuition. Last year he was on my mothers insurance (not an option anymore, too much) and I got a refund for $4300 when I claimed HOH, my student loan interest and I got his AOTC. I had a pay increase from 37,000 to 50,000 this year. I didn't get to claim him this year and my refund was 870. He doesn't have health issues thankfully. His part time income is 10,000

I hope you're getting him the tax saver credit and putting money in a Roth.

monthendclose said:   Good evening. 

My younger brother is 20 and a full time student. He has two jobs but they are both part time. One is Best Buy after school and the other is waitressing at night 

  Males aren't waitresses, they are waiters. 

civ2k1 said:   
wpgabriel said:   
monthendclose said:   My younger brother ... has two jobs ... the other is waitressing at night on saturdays and Sunday's. 
  I am intrigued. Please elaborate.


http://www.hamburgermarys.com/weho/ 

 

  He'd be making at least 50k if he waited tables in there. 

monthendclose said:   Because I pay for his books and about 4000 in tuition. Last year he was on my mothers insurance (not an option anymore, too much) and I got a refund for $4300 when I claimed HOH, my student loan interest and I got his AOTC. I had a pay increase from 37,000 to 50,000 this year. I didn't get to claim him this year and my refund was 870. He doesn't have health issues thankfully. His part time income is 10,000
  Based on this information your refund should be around $4300 if you claim him for net gain of about 3.4k.  At the same time, it would reduce his refund by about 1.4k since he loses the right to his personal exemption and the refundable portion of the AOTC.  So the overall gain in claiming him is about 2k. 

If you claim him he has to pay at least $1.2k for a unsubsidized plan for a net benefit of $800.  The question is if it's worth $800 to go from a highly subsidized plan (or free Medicaid if you're in an expansion state) with lower copays and deductibles to a plan with higher copays and deductibles.  If you want to claim him or 2016 I think you still can if he is on a marketplace plan.  You just pay back the subsidy he received.  Not too sure on this though.

One other thing, as HOH if your AGI is 46k or less you qualify for savers credit which gives you 10% credit for any retirement contributions you made such as a 401k.  You can also still make up to a 5.5k IRA contribution for last year.  If it's a Roth IRA you can put the money in and take contributions out at anytime so you could use it as a emergency fund.  You don't have to pay back the credit if you take the contributions out although it will have an effect on your ability to claim the credit in the future although it's not really a concern  since you'll probably won't qualify in the future anyway due to income limits.  Look up testing period if you want more information on that.  Something to consider if you're claiming your brother for 2016.  Put 5.5k in Roth for the $550 in credits and then you only have to keep it there until April 18.

Keep in mind that the AOTC is only for 2 years. [ETA Sneez pointed out this is wrong, its 4 years]   If he's 20 then he's probably either only got one more year to claim or has used it up.

Another alternative is to claim him for your tax benefits then buy him a cheap short term health insurance plan or get him on a health ministry. Either would cover catastrophic care for him which is most of your concern for a young healthy male.

jerosen said:   Keep in mind that the AOTC is only for 2 years. If he's 20 then he's probably either only got one more year to claim or has used it up.

Another alternative is to claim him for your tax benefits then buy him a cheap short term health insurance plan or get him on a health ministry. Either would cover catastrophic care for him which is most of your concern for a young healthy male.

  AOTC is 4 years.  Hope credit was 2 years.  They expanded it with the name change I think.

Snezz said:   
jerosen said:   Keep in mind that the AOTC is only for 2 years. If he's 20 then he's probably either only got one more year to claim or has used it up.

Another alternative is to claim him for your tax benefits then buy him a cheap short term health insurance plan or get him on a health ministry. Either would cover catastrophic care for him which is most of your concern for a young healthy male.

  AOTC is 4 years.  Hope credit was 2 years.  They expanded it with the name change I think.

  
Thanks for pointing that out.      I wasn't aware it had changed.

 

Chyvan said:   I hope you're getting him the tax saver credit and putting money in a Roth.
  Full time students don't qualify for the retirement savings credit. 

Does Health Care Services come with Student Fees/Tuition at the college he attends?

Did at mine a century ago.



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