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Individual Tax Return
Instructions for Form 1040
Request for Taxpayer Identification Number (TIN) and Certification
Request for Transcript of Tax Return

 

Employee's Withholding Allowance Certificate
Employer's Quarterly Federal Tax Return
Employers engaged in a trade or business who pay compensation
Installment Agreement Request

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Qualifying Health Insurance Coverage

The HCTC program does not provide health insurance coverage. You will need to have or obtain qualified health insurance coverage. All plans that were qualified for the HCTC in 2013 qualify for the HCTC through 2019. This includes COBRA or spousal coverage if the employer, or former employer, did not pay 50 percent or more of the cost of coverage. Individual (private and non-group) health insurance that you purchase for yourself or your family from an insurance company, agent, or broker are also included.

A qualified health plan offered through the Health Insurance Marketplace is not qualified coverage for the HCTC after December 31, 2015. If you are eligible to claim the Health Coverage Tax Credit and enrolled in Marketplace coverage, see our questions and answers about qualifying coverage for more information.

All plans that were qualified for the HCTC in 2013 qualify for the HCTC through 2019 including COBRA or spousal coverage if the employer, or former employer, did not pay 50 percent or more of the cost of coverage. This also includes individual - private and non-group - health insurance that you purchase for yourself or your family from an insurance company, agent, or broker.

A qualified health plan offered through a Health Insurance Marketplace is not qualified coverage for the HCTC for 2018/2019.

Review the instructions for Form 8885, Health Coverage Tax Credit, for information about qualified health insurance coverage that is eligible for the HCTC.

Review the questions and answers about Qualified Health Insurance Plans for the Health Coverage Tax Credit Eligibility for more information.

There are several types of health insurance that qualify for the HCTC beginning January 1, 2016. However, contributions by your employer or your spouse’s employer may limit qualification. See the next question.

  1. Coverage under a COBRA continuation provision;
  2. Coverage under a group health plan available through the employment of your spouse;
  3. Coverage under an employee benefit plan funded by a voluntary employees’ beneficiary association (VEBA) that was established through the bankruptcy of your former employer;
  4. Coverage obtained in the non-group (individual) health insurance market other than coverage offered through the Health Insurance Marketplace; and
  5. Coverage under certain state-qualified health plans established prior to January 1, 2014.

A qualified health insurance plan for the HCTC does not include:

  • Health Insurance Marketplace coverage after Dec. 31, 2015, or
  • Flexible spending or similar arrangements and any insurance if substantially all of its coverage is of excepted benefits described in section 9832(c) of the Internal Revenue Code.

For example, dental or vision benefits purchased separately aren’t part of a qualified health insurance plan for the HCTC. But, premiums paid for a comprehensive package that includes dental or vision benefits may be eligible for the HCTC if the dental or vision benefits don’t represent substantially all of its coverage.

You can’t claim the HCTC for any month that either of the following applies. Any amounts contributed to the cost of coverage by you or your spouse on a pre-tax basis are considered to have been paid by the employer.

  1. You can’t claim the HCTC for any month that, on the first day of the month, you were covered under an employer-sponsored health insurance plan (including any employer-sponsored health insurance plan of a spouse) and the employer paid 50% or more of the cost of coverage.
  2. If you are an Alternative Trade Adjustment Assistance (ATAA) or Reemployment Trade Adjustment Assistance (RTAA) recipient, you can’t claim the HCTC for any month that, on the first day of the month, you were eligible for certain kinds of coverage (including any employer-sponsored health insurance plan of your spouse) where the employer would have paid 50% or more of the cost of the coverage or you were covered under certain kinds of coverage (including any employer-sponsored health insurance plan of your spouse) where the employer paid any part of the cost of coverage.

All insurance that was qualified in 2013 will be qualified after December 31, 2015. In addition, an old rule limiting qualifying individual health coverage to coverage obtained prior to leaving your job was eliminated.

All taxpayers eligible for both the HCTC and the premium tax credit (PTC) should compare the out-of-pocket costs and benefits of Marketplace plans against the HCTC-qualified health insurance plans listed above. If you are eligible for the HCTC and the PTC, you may prefer coverage through a qualified health plan offered through the Marketplace because the Marketplace may be more affordable. Beginning January 1, 2016, Marketplace coverage isn’t qualifying insurance for the HCTC and you will be able to claim only the PTC for your Marketplace coverage and not the HCTC when you file your tax return. 

Yes, but you cannot claim both the HCTC and the premium tax credit or advance payments of the PTC for the same coverage for the same coverage months. If you enrolled in Health Insurance Marketplace coverage for any month during the year, you must reconcile any advance payments of the premium tax credit paid on your behalf, when you file your tax return.

After December 31, 2015, you cannot claim the HCTC on your tax return for months you are enrolled in Marketplace insurance.  You can only claim the HCTC when you file your income tax return, if you are enrolled in HCTC-qualified coverage.  The election required to claim the HCTC can be made for any coverage month and doesn't prevent you from claiming the PTC in earlier months in the year, but you must be enrolled in qualified insurance (see question and answer 1). If it is possible for you to switch into HCTC-qualified health coverage, check with your coverage provider to ensure no gap in coverage would result from terminating your Marketplace coverage. You are still required to reconcile any advance payments of the premium tax credit paid on your behalf during the year when you file. Once you elect to take the HCTC for any month in a year, the election to take the HCTC applies to all subsequent eligible coverage months in the same year for the same coverage.

No. If you enroll in HCTC-qualified coverage listed in answer 1 for any months during the year, you can only claim the HCTC when you file your income tax return.  However, if you are enrolled in the Health Insurance Marketplace, you can continue to receive the benefit of advance payments of the premium tax credit toward your premiums. You would not be eligible for the HCTC for any months you have Marketplace coverage beginning January 1, 2016.

Yes. For example, if you enrolled in Marketplace coverage, you can claim the PTC and receive advance payments through December 2018, switch for January 2019 into VEBA coverage, elect the HCTC for January 2019, and claim the HCTC for the 2019 coverage as either advance HCTC (monthly option) or annually (on Form 8885). Your HCTC election applies only to the 2019 coverage. You remain eligible for the PTC for the 2018 coverage.

For more information about the Health Coverage Tax Credit, go to IRS.gov/HCTC.

IRS.gov/ACA has more information about the health care law and the premium tax credit.

 

State Qualified Insurance

Michigan

You have several options for health insurance that qualify for the HCTC, including options chosen by the State of Michigan as HCTC qualified health insurance coverage. The State of Michigan has chosen the following plans offered by Blue Cross Blue Shield of Michigan:

  • HCTC Plan 1 – Community Blue PPO 
  • HCTC Plan 2 – Simply Blue PPO 
  • HCTC Plan 3 – Simply Blue PPO HSA

You can learn more about these plans by visiting www.statequalifiedplans.com. You can contact the State of Michigan Department of Insurance and Financial Services at 517-284-8800 or 877-999-6442 (toll free). The department’s website is http://www.michigan.gov/difs.

 

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