Effects of DOMA on PPACA

[Yagents]

Finally, everyone will be treated the same

The feds now must recognize same-sex marriage. That changes Obamacare.

“For example, same-sex partners who each have an income of $40,000 may be eligible for the premium assistance tax credits under the ACA – but only if they remain single,” the Jackson Hewitt analysis suggests. “If they marry (in those states that allow same-sex marriage), then they would lose eligibility because their income would be over the threshold for a household of two.”

 

[AllenChicago]

And if they file taxes seperately, these love birds won't qualify for a subsidy. The IRS and HHS computers will blow a gasket in trying to calculate eligibility for this new category of families.

 

[stuy119]

You mean they don't just put in a couple extra lines of code and we're all good to go?

 

[houcoogster]

Least we forget the "Family Glitch" will apply to these love birds that "tie the knot" .....Hay Hay

 

[bluediamond]

I just wrote a young lady this morning who is separated from her husband, how will this work? She's been filing separately for 3 years and he hasn't filed taxes in 6 years. She has a son and she make's right at $45,000. I wonder if there is going to be a provision for a separated spouse. Quite a few separate and never get a divorce. No he is not living in the household.

 

[Ann H]

I just wrote a young lady this morning who is separated from her husband, how will this work? She's been filing separately for 3 years and he hasn't filed taxes in 6 years. She has a son and she make's right at $45,000. I wonder if there is going to be a provision for a separated spouse. Quite a few separate and never get a divorce. No he is not living in the household.

The rules are that married people must file "married joint" to get a subsidy.

Currently there are not exceptions. However, the IRS is planning to issue an exception regarding domestic abuse situations and abandoned spouses who are unable to locate the other spouse. It's on the Obamacare Implementation "to-do" list.

 

[timsip]

Ann, I am glad they are addressing those situations, but bluediamond is right and I think you will agree, there are many spouses that are separated but still married. I would think this population segment would be just as if not more important. Nothing like leaving the spouse that the kids live with out to dry. You have one parent that has the two kids living with him/her making $50K, that family would be eligible for subsidy until you have to add in the other parent's $50K income regardless of how much of that is going to the rest of the family and the parent with the two kids is out of luck.

I think we will all run into similar situations, very important to understand how it works...or doesn't work so to speak.

 

[deadhead]

Here's to hoping all this crap fails and gets repealed

 

[Ann H]

I agree that these issues must be addressed (and probably will be addressed). However, currently here is how the IRS final rules on subsidies reads:

iii. Married Taxpayers Filing Separately

Section 36B(c)(1)(C) provides that married taxpayers who do not file a joint return are not applicable taxpayers and are not allowed a premium tax credit. Accordingly, married taxpayers who receive advance credit payments but do not file a joint return must repay the advance credit payments. The advance credit payments must be allocated equally to each taxpayer for purposes of determining the amount of excess advance payments. The final regulations clarify that this equal allocation also applies if one spouse is treated as unmarried under section 7703(b) (and may, for example, properly claim the premium tax credit on a return filed as head of household).

The proposed regulations requested comments on special rules for taxpayers who receive advance payments but face challenges in meeting the joint return requirement, for example because of the incarceration of a spouse, domestic abuse, or a pending divorce.

Numerous commentators stated that the final regulations should provide special rules allowing these spouses to file separate returns and claim the premium tax credit. Commentators suggested that abandoned spouses also warrant an exception. Other commentators noted that other married taxpayers may face challenges in filing a joint return and asked for a hardship exemption from the joint filing requirement.

Commentators suggested that taxpayers should be able to certify on the premium tax credit form that they meet the criteria for an exemption from the joint filing requirement. One commentator suggested granting an exception in case of domestic violence for a taxpayer who has or during the taxable year had an order of protection.

Some commentators, noting that many of these situations are not resolved in a single taxable year, requested a three-year exception to the joint filing requirement.

The final regulations do not provide special rules allowing married taxpayers to claim the premium tax credit on separate returns. However, the IRS and the Treasury Department intend to propose additional regulations regarding eligibility for the premium tax credit to address circumstances in which domestic abuse, abandonment, or similar circumstances create obstacles to the ability of taxpayers to file joint returns. Comments are requested on the documentation that a taxpayer could provide to establish that he or she cannot file a joint return because of the domestic abuse, abandonment, or other similar circumstances, on what treatment should be accorded the other spouse if he or she does not file with documentation supporting an exception, and the need for anti-abuse rules.​

That final rule is found here: Internal Revenue Bulletin - June 11, 2012 - T.D. 9590. It just goes to show you that "final" never means "final" with the government.

 

[ctg]

I had a friend ask me about this today. She and her partner are married...Iowa is a same sex marriage state. Glad this thread got started, I didn't know how to answer.

"Cheaper to keep her" may not apply anymore...