Step 3:Tax Household. On Tracking Sheet. On the Resource Page

Transcription

1 Step 3:Tax Household On Tracking Sheet On the Resource Page

2 Why Taxes Household? Marketplace (MP) follows IRS tax rules when determining household size and income & MP results are reconciled on the tax return. MP application estimates household & income on future tax return. Tax return captures actual household & income. 2019

3 Tax Caveat! You work with tax information as a Certified Application Counselor, but you are not responsible for resolving tax issues or answering tax questions Our Volunteer Leadership Team can help you determine tax household and if someone is a dependent.

4 Filing Status Requirements Single Married Filing Jointly Married Filing Separately Head of Household Qualifying Widow(er) with Dependent Children Not married. Married, whether living together or apart, and file taxes together. Can be married via common law or courthouse. Married, whether living together or apart, and file taxes separately. Unmarried or considered unmarried for tax purposes. Must pay more than half of the costs of keeping up the home for a qualifying person whom s/he will claim as a dependent. Special rules for a person whose spouse passed away in the tax year or the 2 previous tax years.

5 Married Filing Separately (MFS) MFS are generally NOT awarded tax credits BUT there are 3 BIG EXCEPTIONS to get PREMIUM TAX CREDITS: 1 Victim of domestic abuse OR 2 Abandoned by spouse OR 3 Qualifies to file as Head of Household (most common)!! Think someone is MFS? Talk to tax expert on Volunteer Leadership Team! If exception, answer NO to Are You Married? because he is considered unmarried for IRS purposes.

6 Head of Household Requirements A married person is considered unmarried and eligible to file Head of Household if answers YES to all these questions for 2019: Will you file taxes separately from your spouse? Will you live separately from your spouse from July 1 to Dec 31, 2019 Will you pay more than half of the cost of keeping up your home? Do you have a child, stepchild, or foster child (of any age) who lives with you for more than half the year? Will either you or the child s other parent claim the child as a dependent? LOOKING AHEAD! If YES to all: answer SINGLE or NO to marriage questions on application, because the consumer is unmarried for IRS purposes.

7 Two Types of Dependents included on tax return 1 Qualifying Child 2 Qualifying Relative / Qualifying Person Important! Does not have to be related to filer but must meet certain requirements!

8 Qualifying Child = Filer s child, step child, adopted child, brother, sister, niece, nephew or grandchild if s/he Is a US citizen or resident of US, Canada or Mexico Lives with tax filer for more than half the year (2019) (except for temporary absences) Meets AGE requirement: Under 19 at end of 2019 or under 24 if a full-time student for 5 months in 2019 or any age if determined disabled Qualifying Child does not provide more than half of his/her own support in 2019 (rare)

9 Qualifying Relative (think Qualifying Person ) = Relative, step relative, in-law, or full-time member of tax filer s household in 2019 Cannot be claimed as a Qualifying Child US citizen or resident of US, Canada or Mexico Receives more than 50% of his/her support from tax filer Related to tax filer or lives in tax filer s home all of 2019 Must earn less than ~ $4000 taxable income in 2019

10 Watch for people with $0 income: Ask: How are you supporting yourself? Is someone paying your bills? Who do you live with? Likely a DEPENDENT if US tax filer is paying their bills. NOT a dependent if supporting self with income / savings from another country or support from family outside US. Our Volunteer Leadership Team can help you determine tax household and if someone is a dependent.

11 Dependents in Canada and Mexico Can be dependents on tax return May have ITINs or SSNs Dependents who are not US citizens must reside in US, Mexico or Canada to be included on tax return.

12 Individual Taxpayer Identification Number (ITIN) IRS issues for tax purposes if you don t qualify for SSN Spouses can live anywhere and get ITIN. Dependents must live in US, Mexico or Canada Undocumented? Apply for an ITIN when you file your tax return. Married to someone who is undocumented? Include that person on MP application & refer to our free tax services to apply for ITIN.

13 Tax Question Group Quiz! 1. John is married, but has lived separately from his spouse for years. He has a son, Eric, who is 15 and who John will claim on his taxes. John s spouse does not provide any financial support. How could he file taxes? How big John s tax household? 2. If John s mother does not work and lives in the same city, is supported entirely by John and lives in an apartment that John pays for, but whom he says he will not claim, is John s mother her own tax household?

14 Step Three: The Tracking Sheet

15 Completing Step 3: Tracking Sheet Codes

16 Alice, age 42, is married to John Henry, 38. They have two children, Jill, age 15, and Daniel, age 11. Everyone except John Henry is a US citizen. John Henry has a green card with an effective date of 8/31/2000. The Category Code is IR1. Alice heard about our services through Texas Workforce Solutions. Both children have CHIP Alice had insurance through her employer that will end at the end of the year (she s quitting to start her own business) and John Henry has never had health insurance. Alice heard about our services through Texas Workforce Solutions. Alice is a tobacco user

17 Writing Tracking Sheet Codes H 38 LPR 8/31/2000 IR1 None Never W 42 C N/A Emp N/A D 15 C N/A CHIP N/A Son 11 C N/A CHIP N/A

18 Reading Tracking Codes! S 32 C N/A MP-Oscar N/A D 2 C N/A MC N/A M of S 66 LPR N/A MP-Amb N/A F of S 67 LPR N/A MP-Amb N/A Reference Package Page 3

19 Reading Tracking Codes! H 40 C N/A MP-Oscar N/A H 53 F Visa N/A None Never UT Reference Package Page 4

20 Questions?