Health Coverage Tax Credit

Extension of the credit

The Health Coverage Tax Credit (HCTC), a Federal tax credit administered by the IRS, has been extended for all coverage months beginning in 2020. This means eligible individuals can receive a tax credit to offset the cost of their monthly health insurance premiums for 2020 if they have qualified health coverage for the HCTC. A qualified health plan offered through a Health Insurance Marketplace is not qualified coverage for the HCTC.

A letter was sent in October 2019 advising participants, in the HCTC Advance Monthly Program, to seek alternative insurance options due to the impending expiration of the HCTC law at the end of 2019. All participants were later removed from the HCTC Advance Monthly Program.

With the extension of the HCTC for 2020, participants may be able to work with their vendors/providers to be placed back on health coverage that qualifies for the HCTC and either re-enroll in the HCTC Advance Monthly Program or claim the HCTC on their annual Federal income tax return filed next year.

Participant's next steps to re-enroll in the HCTC Advance Monthly Program:

  • Individuals who were previously enrolled in the HCTC Advance Monthly Program must submit a new Form 13441-A, HCTC Monthly Registration and Update PDF, to re-enroll for 2020 and provide all required documentation including a copy of the health insurance bill reflecting their 2020 insurance rates.
  • Individuals should continue to pay the entire amounts of their premiums directly to their insurance providers until they receive the HCTC approval letter confirming their 2020 Advance Monthly Program payment amounts.
  • Enrolled participants may request reimbursement for 72.5% of the payments they paid directly to the vendor/provider for 2020 qualified health coverage by using Form 14095, HCTC Reimbursement Request, once they have submitted a payment through the program, or may claim reimbursement on their annual Federal income tax return by using Form 8885, Health Coverage Tax Credit.

Individuals who choose not to enroll in the HCTC Advance Monthly Program, or those enrolled with vendors/providers who are not participating in the program, may be eligible to claim reimbursement for 72.5% of their payments for 2020 qualified health coverage on their annual Federal tax return by filing Form 8885, Health Care Tax Credit.

As mentioned above, the IRS will be sending a letter to all participants enrolled in 2019.

Eligibility

Eligibility for the HCTC is restricted to the following groups of individuals:

  • Individuals eligible for Trade Adjustment Assistance (TAA) PDF allowances because of a qualifying job loss
  • Individuals between 55 and 64 years old whose defined-benefit pension plans were taken over by the Pension Benefit Guaranty Corporation (PBGC)

You may be eligible to elect the HCTC only if you are one of the following:

  • An eligible trade adjustment assistance recipient PDF, alternative TAA recipient, or reemployment TAA recipient;
  • An eligible Pension Benefit Guaranty Corporation payee; or
  • The family member of an eligible TAA, ATAA, or RTAA recipient, or PBGC payee who is deceased or who finalized a divorce with you.

You are not eligible for the HCTC if you:

  • Can be claimed as a dependent on another person’s federal income tax return; or
  • Are enrolled in Medicare, Medicaid, the Children’s Health Insurance Program, or the Federal Employees Health Benefits Program or are eligible to receive benefits under the U.S. military health system (TRICARE); or
  • Are enrolled in an Affordable Care Act Marketplace insurance.

The HCTC program will expire December 31, 2020. Affected individuals should monitor this page for news and updates.

For more information about the HCTC