Amending Your Tax Year 2014 Return to Claim the Health Coverage Tax Credit
The Health Coverage Tax Credit (HCTC) extended and modified. The HCTC, which expired after 2013, has been reinstated retroactive to January 1, 2014, with modifications. If you were an eligible trade adjustment assistance (TAA) recipient, alternative TAA recipient, reemployment TAA recipient, Pension Benefit Guaranty Corporation (PBGC) pension payee, or a qualifying family member, you may be able to claim the HCTC for qualifying health insurance coverage during 2014.
Important changes to the HCTC for 2014. Eligibility for the HCTC in 2014 is generally the same as before. However, three major changes were made.
- You must make an election to claim the HCTC for a month during which you were eligible for the HCTC. Once you elect to claim the HCTC, you can’t claim the premium tax credit (PTC) for the same coverage in that month or in any subsequent months during the year in which you’re eligible to claim the HCTC. If you elect to claim the HCTC for eligible coverage for which you previously claimed the PTC on Form 8962, Premium Tax Credit, you must correct the PTC you previously claimed when you amend your tax return.
- You may claim the HCTC for all qualified health plans offered through a Health Insurance Marketplace in addition to all plans that were previously qualified.
- You no longer have to be enrolled in non-group (individual) coverage for at least 30 days before you became eligible for the HCTC in order for your coverage to be qualified health insurance for the HCTC.
Instructions for claiming the HCTC for 2014. To claim the HCTC for 2014, you must first file, or have filed, an original 2014 federal income tax return without claiming the HCTC, even if you have no other filing requirement. Then file Form 1040X, Amended U.S. Individual Income Tax Return, to amend your original 2014 tax return to claim the HCTC using Form 8885, Health Coverage Tax Credit.
Write “HCTC” in large, bold letters at the top of page 1 of the Form 1040X. Use the Form 1040X instructions with the following modifications:
Line 15 On line 15 of Form 1040X:
- Check the box for Form 8885.
- Attach the tax year 2013 Form 8885, Health Coverage Tax Credit
- At the top of Form 8885, cross out “2013” and write “2014” in large, bold numbers.
- Follow the 2013 Instructions for Form 8885 to figure your HCTC, including the instruction requiring that you attach documents that prove that your health insurance plan is qualified and that you paid the qualified health insurance premiums. This proof must include:
- An official letter reflecting your eligibility for the months claimed in 2014:
- For trade certified individuals demonstrating TAA, alternative TAA, or reemployment TAA eligibility—a copy of the official letter from the Department of Labor, your state workforce agency or employment office stating you are eligible for trade adjustment benefits
- For PBGC eligibility—a copy of the official letter from the PBGC stating you received a benefit paid by the PBGC
- For each month you are claiming the credit for 2014 you must also provide:
- Proof of insurance
- Proof of payment for insurance
Check IRS.gov/HCTC for more information about proof of coverage and eligibility.
You cannot claim both the HCTC and the PTC for the same coverage month. If you claimed the PTC on your original 2014 return or advance payments of the premium tax credit (APTC) were made for you, your spouse, or a dependent in 2014, you must include Form 8962 with your amended return. See these Question and Answers for special instructions on completing Form 8962.
When completing Form 8885 for Marketplace coverage, the cost of coverage you report on line 2 to compute the HCTC is the amount you paid to the insurance provider for all eligible coverage months subject to the HCTC election plus the amount of the corresponding monthly APTC shown on Form 1095-A, lines 21-32, column C, for those eligible coverage months subject to the HCTC election. See these Question and Answers.
Part III. You must make the required election to take HCTC in Part III of Form 1040X when explaining why you are filing Form 1040X. For example, if you are electing to take the HCTC for the entire year, write “I am claiming the HCTC. I elect HCTC starting in January.”
HCTC adjustment. The IRS will review your amended return, additional tax forms and verification documents to process the HCTC adjustment. The IRS will take into account all of your payments for the tax year you are amending, as well as the refund of any overpayment requested on your original return or after other adjustment by the IRS. This will include any adjustments relating to your 2014 PTC. The IRS may contact you for more information.
Other items on your return. You may need to adjust other items on your return. For example, claiming the HCTC can change your:
- Medical expense deduction on Schedule A (Form 1040);
- Self-employed health insurance deduction on Form 1040, line 29;
- Net premium tax credit on Form 1040, line 69; Form 1040NR, line 65; or Form 1040A, line 45;
- Excess advance premium tax credit repayment on Form 1040, line 46; Form 1040NR, line 44; or Form 1040A, line 29;
- Alternative minimum tax on Form 1040, line 45, or Form 1040NR, line 43; and
- Nonrefundable credits.
Assembling and mailing your return. Be sure to write “HCTC” in large, bold letters at the top of page 1 of Form 1040X and attach a copy of the official letter of eligibility from the PBGC, Department of Labor, or your state workforce agency or employment office. Also attach proof that your health insurance plan was qualified and that you paid the qualified health insurance premiums.
Mail the completed Form 1040X and Form 8885, supporting documents, and Form 8962, if required, to the following address, regardless of where you live:
Department of the Treasury
Internal Revenue Service
Austin, TX 73301-0215
If using a Private Delivery Service, the address is:
Internal Revenue Service
3651 South I-H 35, Stop 6055 AUSC
Austin, TX 78741
Go to IRS.gov/HCTC for questions and answers and information about claiming HCTC for tax years 2015 and 2016.