Skip to comments.Supporting a relative? Then pay their Obamacare penalty!
Posted on 01/31/2013 4:58:54 PM PST by mrsmith
"...b. Liability for shared responsibility payment
i. Liability for dependents
Under section 5000A(b)(3)(A), if an individual with respect to whom the shared responsibility payment is imposed for a month is another individual's dependent (as defined in section 152) for the taxable year including that month, the other individual is liable for the shared responsibility payment for the dependent. The proposed regulations clarify that a taxpayer is liable for the shared responsibility payment imposed with respect to any individual for a month in a taxable year for which the taxpayer may claim a personal exemption deduction for the individual (that is, the dependent) for that taxable year. Whether the taxpayer actually claims the individual as a dependent for the taxable year does not affect the taxpayer's liability for the shared responsibility payment for the individual."
Paying over half of a relative's income means you must pay their IRS Obamacare penalty if they are a "Qualifying Relative" who makes less than $3,800 a year. They don't have to live with you.
Dependents: IRS Pub 501: http://www.irs.gov/publications/p501/ar02.html#en_US_2012_publink1000220868
See Table 5
(Excerpt) Read more at irs.gov ...
“Relatives who do not have to live with you. A person related to you in any of the following ways does not have to live with you all year as a member of your household to meet this test.
Your child, stepchild, foster child, or a descendant of any of them (for example, your grandchild). (A legally adopted child is considered your child.)
Your brother, sister, half brother, half sister, stepbrother, or stepsister.
Your father, mother, grandparent, or other direct ancestor, but not foster parent.
Your stepfather or stepmother.
A son or daughter of your brother or sister.
A son or daughter of your half brother or half sister.
A brother or sister of your father or mother.
Your son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.”
Wow, they thought of everything, didn’t they?
wait, to go after YOU for paying people/family to watch your kids and small business that employ family
So how much is owed by the “baby daddy” who fathered 9 kids with 6 women?
How much is owed by the grandmothers of these kids.
How much owed by the long gone grandfathers of these kids.
Ancestry.com could have a whole new product line!
Maybe TurboTax needs to market this product!
Thought of everything... and told nothing!
“Under the table” payments won’t be reported and won’t trigger this.
Charity to relatives will though because they’ll likely sign up for welfare (like food stamps) and have to report the money.
I let my buddy who has fallen on hard times move in with me. I didn’t charge him rent of board or anything until he got a job, and got his car payment and insurance current. Then after four months He started paying me his half of everything and started paying for his won food.
I suppose he was technically my dependent, but I considered it a gift to a friend.
By this, I would be on the hook, for his health insurance too?
Damn you can’t even help out a friend now...they expect them to go to the government
If he is an unrelated adult he is not a dependent nor could be claimed as one.
"Okay, all of you who have what you think of as "good" ideas for health reform we will have a computer set up in Room 125, so bring your thumb drives after lunch on Tuesday.
We will go through what you contribute and add page numbers and all that later."
So they added everything. Some people had more stuff to add than the others, but there were more than a few who had more than one pocketful of thumb drives to add. They tended to irritate the others because they spent so much time at the computer.
The health care staff laboriously read through all of the submissions and did spellcheck and stuff. And they made some additions of their own.
But what amazed them were all the seemingly unrelated items that had nothing to do with healthcare.
They merely shrugged their shoulders and patted each others backs because they were finally going to be able to do to America what no other foreign leader has been able to do.
But what happens when you quickly force something down someone's throat?
Huh...can you find the word "vomit" anywhere in the manual? It must be in there somewhere.
No, no a friend wouldn’t qualify as a dependent for the IRS.
But if you did that for a relative you WOULD be socked by the IRS for the Obamacare penalty. Whether you claimed him as a dependent or not.
"It does not apply to OUR families
or any Islamic harem, SUCKERS!!!!!!"
It does amuse me that some of the 30ish yuppies that wrote this grabbag of ‘gotchas’ will hear from their rich Dem donor parents that support for their freeloading lifestyles will have to be cut so the parents can pay the $20,000+ IRS penalty LOL!
But the middle-class families scrimping to support a relative in trouble.
Wow! What a horrible thing to do to them.
Wow, they thought of everything, didnt they?
They missed the dog, cat, bird and bunny!!!! /s
It seems that Obamacare is going to be a real whammy-job on charity.
Huh...almost as if it was planned that way.
Sure does seem planned. So many gov programs injure the family unit.
The media has had a day to read the IRS rules and still makes no mention of this. That’s probably deliberate too.
Sorry, the penalty DOES apply to a roommate if the other criteria are met.
“The person must either have lived with you for the entire year as a member of the household (a person who is not actually related to you may meet the requirements in this way), or be related to you... “
IRS Bulletin 501 is the one about dependents.
Still haven’t seen any mention of this in the news.
If you claim the personal deduction then you are liable. I don’t see the problem. Unless you claim the worthless Brother in Law that camps out on the sofa as a tax deduction, you are not responsible.
That seems incredible, doesn’t it?
But the fact would never be known to the IRS if the benefactor doesn’t claim the recipient as an exemption.
And, in this case, the support only went on for four months.
And I think the recipient’s income for the year has to be below a certain level?
"Whether the taxpayer actually claims the individual as a dependent for the taxable year does not affect the taxpayer's liability for the shared responsibility payment for the individual"
Sorry, I misread it.
If they make more than about 4 grand in the year it won’t apply.
I’m not a tax expert but I think you’re pretty safe.