What is a Shared Policy?
A shared policy occurs when a qualified health plan has been purchased from the Marketplace or from a state health care exchange and it covers at least one individual on the tax return and one individual not on the tax return.
Do I need to complete the Allocation portion?
A shared policy allocation isn't needed if all members of the household are covered under the same policy. If the primary taxpayer is claimed as a dependent on another return and is covered under that marketplace insurance, they won't complete Form 8962. Instead, the taxpayer who is claiming the primary taxpayer as a dependent will include them on their Form 8962.
When the taxpayer has a shared policy, the amounts reported on Form 1095-A need to be allocated between the taxpayer's tax return and the tax return(s) of the other individual(s). This is known as a Shared Policy Allocation. Policies can be shared by any number of taxpayers (form allows for four entries).
The total of the allocations needs to add up to 100%. The allocations do not have to be made evenly between the covered individuals. It is up to the individuals to decide how they wish to allocate to each person. For example, a policy that consists of a taxpayer, spouse, and their child who is filing his or her own tax return might be allocated 100% to the parents and 0% to the child.
How to report the allocation?
To report the allocation in our program, follow these steps:
- Access return
- Health Insurance
- Complete the Health Insurance questions up to the Advanced Premium Tax Credit (1095-A) screen
- Check the box indicating your need to allocate the policy amounts at the top of the screen
- Enter the policy number, allocation start and end months, and percentages for the monthly amounts
- Continue through the remaining Health Insurance questions.
For examples of shared policy allocations, please refer to the 8962 Instructions.