Effects of DOMA on PPACA

[Ann H]

I asked my husband about this (he's an accountant), and he said that the IRS will most likely fix this problem. For instance the Earned Income Tax Credit is only available to married persons if they file married joint, except that if the spouses are separated and did not live together for 6 months one can file head of household and claim the EITC credit. So, that loophole is probably going to be one of the loopholes that the IRS offers to fix this situation.

He said there are provisions in the final subsidy ruling already about this kind of thing, especially for people who marry or divorce during the year, so I will look that up with him tomorrow and get back to you on it.

 

[houcoogster]

Ann,
I'm going to talk to Sam and see if we can have a "little halo" placed over your name. You've earned it!

 

[Ann H]

Ann,
I'm going to talk to Sam and see if we can have a "little halo" placed over your name. You've earned it!

LOL. I always wondered what "guru" next to my name meant!

 

[timsip]

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.

..unless you owe them, of course!

 

[Ann H]

I talked this over with my husband (an accountant for 35 years), and we looked at the IRS regs. One rule, mentioned often in the regs is that married couples must file their tax return as "married filing joint", or else they don't get a tax credit (subsidy). For simplicity's sake, just consider this to be the major rule.

Are there exceptions? A few exceptions, which will be very difficult to work with, and you just need to refer it to an accountant. For instance, if there is a marriage or divorce during the year, it gets complicated. And, if a separated married couple with dependents does not live in the same house for the last 6 months of the tax year, sometimes one spouse can legitimately file as "head of household with qualifying person", and legitimately wind up with a tax credit (although the other spouse cannot get a tax credit in that situation). But this "head of household with qualifying person" situation is very tricky, especially when children are involved, and especially because it usually involves a very uncooperative spousal situation or sometimes a missing spouse or spouse in prison. A good Accountant is called for in this kind of situation.

A bit of insight - often married people live separately, but when it comes time to file their tax returns, they actually file "married filing joint".

So.... consider the major rule for subsidies to be "MARRIED FILING JOINT" only. If you have a situation where the married couple says they are filing differently than that - call an Accountant. And be aware that when the dust settles, they probably aren't going to wind up with a subsidy anyway, because the rules are so difficult.

Mid-year marriages and divorces are common too. The rules are kinder in these situations, but the subsidy calculation gets mathematically difficult, so call an Accountant in those cases, too.

 

[taterpeeler]

thank you ann for both the PM and the indepth info you and your husband provided