Covered California and ACA related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the ACA and Covered California knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Separate Returns = No Subsidy?

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Question: What if a married couple is filing separately? Based on our individual incomes, my husband would qualify for Medi-Cal and I should be eligible for a subsidy. But the exchange told me that in order to receive premium assistance spouses are required to file a joint income tax return. Is that true?

Answer: Yes. The law says if you file as married filing separately, you will not be eligible for any premium subsidy at all, regardless of income. Only domestic abuse, abandonment, or other special circumstances (pending divorce?) may be exempted from the requirement to file a joint return in order to qualify for the premium subsidy. Reference TD 9590, IRS


My husband and I filed for divorce and have lived apart for two years. We haven’t finalized the divorce but were wanting to file our taxes separately. Can we do so and when I apply for coverage on Covered California, can I used only my income even though we’re still married? Also, can I include my daughters on the application?

The IRS just this week posted a new rule that spouses living apart as the result of domestic violence can file separately and claim the tax credits, too. Too little, too late.

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Here’s why the information from Covered CA, if repeated accurately above, is not necessarily reliable.

“1. Legally Separated”

Divorced and legally separated are two very different things. Legally separated means a divorce action is pending before the court (a complaint has been filed for adjudication). Divorced means a final decree has been issued. Under federal law, premium tax credits are NOT available to “legally separated” persons unless they have lived apart for at least 12 consecutive months.

“2. Married but living apart” is used only as the criteria to qualify as head of household when a dependent child may be claimed for tax filing purposes. If the taxpayer meets ALL of the listed criteria under this test, then premium tax credits may be available, based on MAGI.

The state has no authority to waive federal rules (IRS/IRC) governing eligibility for premium tax credits. Unless a person meets the federal requirements, nothing anyone from Covered CA says to the contrary means more than the air that was consumed to breathe those words.

I have a client that is married but files separately from her husband. Here is the response I got from a higher-up at Covered California.

The general rule is that married couples must file jointly to be eligible for tax credits. However there are two situations where an individual may not be considered married under the Affordable Care Act, see below:

  1. Legally Separated: individuals who are legally separated under decree of divorce or of separate maintenance are not considered married and can individually be eligible for tax credits, depending on their separate household incomes.

  2. Married but living apart: If an individual lives apart from his/her spouse and meets certain tests, that individual may be able to file as head of household and may be eligible for tax credits, even if s/he is not divorced or legally separated. To qualify for head of household status on the last day of the year, you must meet all of the following: a. File a separate return; b. Paid more than half the cost of keeping up your home for the tax year; c. The spouse did not live in the home during the last 6 months of the tax year; d. Your home was the main home of your child, stepchild, or foster child for more than half the year; AND e. You must be able to claim an exemption for the child.

You could always get divorced and live in sin with each other, as roommates “with benefits”. How wonderful life is now that the Defense of Marriage Act is dead, too.

This is a game that married Social Security beneficiaries once had to play, too, in order to maximize their retirement income benefits.

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