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Questions and Answers on Amending a Tax Year 2014 Return to Claim the Health Coverage tax Credit

Q1.  How do I know if I am eligible to claim the HCTC for 2014? How will the IRS know?

A1. 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 during 2014, you may be able to claim the HCTC for qualifying health insurance coverage. The PBGC, the Department of Labor or a State Workforce Agency should have notified you by letter. 

Remember you, your spouse and eligible family members must have been enrolled in qualified health insurance coverage for any months in 2014 that you are you claiming the HCTC. A qualified family member must be the spouse, or former spouse in the event of a divorce, or a dependent of the PBGC payee or TAA recipient and be enrolled in a qualified health plan, including COBRA. If the TAA, ATAA, or RTAA recipient or PBGC pension payee is deceased, enrolled in Medicare, or finalized a divorce with you, the qualified family member is eligible to receive the HCTC for up to 24 months from the month of the event.

Q2.  What health insurance qualifies for the HCTC?

A2.  All qualified health plans offered through a Health Insurance Marketplace and all plans that were previously qualified for the HCTC qualify for the HCTC for 2014. Beginning in 2014, you no longer have to be enrolled in non-group (individual) coverage for 30 days before you became eligible for the HCTC.

Q3. I already filed a 2014 federal tax return. What should I do?

A3. File Form 1040X, Amended U.S. Individual Income Tax Return, to amend your original 2014 tax return if you are eligible to claim the HCTC. You must make an election in order to claim the HCTC for a coverage month for which you’re eligible for the HCTC. This election applies to all subsequent coverage months in 2014 for which you’re eligible to take the HCTC. If you have not filed your 2014 tax return, you must file an original return without claiming the HCTC, even if you have no other filing requirement. It may take up to six weeks to process your original tax return. Follow the instructions to amend your return to claim the HCTC only after your original return is processed by the IRS.

Q4. Are there special instructions for claiming the HCTC when I amend my return?

A4.  Yes. Check IRS.gov/HCTC for important information about amending your tax year 2014 return to claim the HCTC. This includes:

  • Making the required election to take the 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.”
  • Filing Form 8885, Health Coverage Tax Credit, with your amended return; (Refer to Q&A #5)
  • Attaching a copy of the official letter of eligibility from the PBGC, Department of Labor, or your state workforce agency or employment office; (Refer to Q&A #6) and
  • Attaching proof that your 2014 health insurance plan was qualified and that you paid the qualified 2014 health insurance premiums. (Refer to Q&A #6)

HCTC eligible taxpayers who enrolled in a qualified health plan offered through a Health Insurance Marketplace in 2014 may need to attach additional forms and documents. (Refer to Q&A #7, #8 and #9.)

Q5. There is no Form 8885, Health Coverage Tax Credit, for 2014.  What form should I use?

A5. Attach Form 8885, Health Coverage Tax Credit, for tax year 2013 but cross out “2013” and write “2014” in large, bold numbers at the top of the form. 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.  On line 15 of Form 1040X, check the box for Form 8885.

Q6. What documents should I include and attach to my amended return?

A6.  You need to attach several different documents with your amended return for the IRS to process your claim for the HCTC. If you do not attach the required documentation, processing delays may occur if the IRS has to correspond with you for additional information. 

Attachment #1: You must attach documents that reflect your eligibility for the HCTC. 

  • For 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

Attachment #2: You must also attach documents to verify that your 2014 health insurance plan was qualified and you paid the qualified 2014 health insurance premiums. The IRS will accept the following types of documents: 

  • Invoices and proof of payment in 2014 - canceled checks, bank statements or credit card statements - for the amount you are claiming on Form 8885, line 2. Note: If the qualified health insurance plan is through the spouse's employer, proof of payment should include copies of paycheck stubs showing the health coverage deductions for the qualified months and a letter from the spouse’s employer that the employer contributed less than 50% of the cost of the coverage.
  • COBRA Continuation Coverage proof of payment must include one of the following: COBRA notice of rights to continue health coverage in an employer's group plan, or signed election form confirming COBRA enrollment, or a letter or statement from an employer or third party benefits administrator that confirms the COBRA enrollment.  

Q7.  I enrolled in a qualified health plan in 2014 through a Health Insurance Marketplace. What else do I need to do?

A7. You can claim the HCTC for all qualified health plans offered through a Health Insurance Marketplace in 2014. However, you cannot claim both the HCTC and the premium tax credit (PTC) for the same coverage for the same coverage months. If you elect to claim the HCTC for eligible coverage for a specific month that you previously claimed the PTC on Form 8962, Premium Tax Credit, you must correct the PTC you previously claimed for that month when you amend your tax return by filing an updated Form 8962 with your amended return.

Q8. How do I report the 2014 premium tax credit or any advance payments on my amended return?

A8. You should:

  • Complete Form 8962, Premium Tax Credit, as follows before you complete Form 8885.
  • Report advance payments of the premium tax credit (APTC) on Form 8962 for all months APTC was made in 2014.
  • Claim PTC on Form 8962 for coverage not subject to the HCTC election.
  • Leave Form 8962, line 28, blank, if you elect the HCTC for all Marketplace coverage for at least one eligible coverage month. The Form 8962, line 28, repayment limit does not apply to coverage for which you elect the HCTC for any month in the tax year.
  • Do not complete Part 5 of Form 8962 for coverage for which you elect the HCTC for any month.

When you complete Form 8885, the cost of coverage you should use to compute the HCTC includes the amount you paid to your insurance provider for all the coverage months checked on Form 8885 plus the amount of the monthly APTC shown on Form 1095-A, lines 21-32, column C, for the months checked on Form 8885. However, if you complete Part 4 of Form 8962, include only the enrollment premiums and APTC allocated to you.

Q9.   Will I have to repay any premium tax credit or any advance payments of the premium tax credit that I received from my 2014 tax return?

A9. If you claimed the PTC on your 2014 return, you must correct your 2014 PTC for any months you claim the HCTC.

Example: Jack and Jill originally filed their 2014 tax return and received $12,000 of net premium tax credit for health insurance purchased from the Marketplace for their coverage from January through December in 2014. They have now learned they are eligible to claim a $15,000 HCTC for those same coverage months and want to amend their 2014 return.  When they file their Form 1040X return to claim the HCTC, Jack and Jill should check the boxes for Form 8885 and 8962 on Form 1040X, line 15, and should enter $12,000 (net PTC as reported) in column A; $3,000 ($15,000 HCTC - $12,000 net PTC) in column B; and $15,000 in column C.  They will receive a refund for the additional $3,000 in health care credits reported on Form 1040X assuming there are no other changes and they submit the required documentation.

You may also have an excess APTC repayment on Form 8962 if APTC was paid for you, your spouse, or a dependent in 2014. Enter the excess APTC repayment on Form 1040X, line 6, column B. Write “APTC repayment” in the space below line 6.

Q10. Will I need to make any other changes when I amend my return?

A10. You may need to adjust other items on your return. 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.

Q11. Where do I mail my amended return and supporting documents? Are there any special instructions?

A11.  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. You must also attach proof that your 2014 health insurance plan was qualified and that you paid the qualified 2014 health insurance premiums to your Form 1040X.

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

Q.11. How long will it take the IRS to process my return? Will the IRS contact me?

A. 11. The IRS will review your amended return, additional tax forms, and verification documents to process the HCTC claim. All of your payments for tax year 2014 received up to the date of the amended return are taken into account, as well as any refund paid to you from your original return and other adjustments by the IRS, including relating to your 2014 PTC.  

The IRS may contact you for more information, which may also delay processing your return. Respond promptly to the address listed on the letter from the IRS if you are asked to provide more information.

A Form 1040X - Amended Tax Return can take up to 16 weeks to process once the IRS receives it. It can take up to three (3) weeks from the date you mailed it to show up in our system. Calling us will not help us process your return more quickly.

Use the IRS.gov Where's My Amended Return? online tool or call our automated toll-free number 866-464-2050 to check on the status of your amended return. You can start checking three weeks after your Form 1040X has been mailed.

IRS customer service representatives will not be able to provide additional information while your amended return moves through processing. There is no need to call our other toll-free numbers unless Where’s My Amended Return? specifically indicates that you should call.

Use Where's My Amended Return? to follow your amended tax return from receipt until processing is completed. While your amended tax return is being processed you can follow it through three stages: Received, Adjusted, and Completed.

Q12. Where can I get help preparing my amended return?

A12. Go to IRS.gov for links to resources for options to help you.

Go to IRS.gov/HCTC for questions and answers and information about claiming HCTC for tax years 2015 and 2016.

Q 13. How do I claim the credit for tax year 2014 if I file using Form 1040-PR or Form 1040-SS?

A13: You can claim the HCTC for 2014 using Form 1040-SS and 1040-PR by following the Form 1040PR Instructions or Form-SS Instructions. If you already filed an original Form 1040-SS or PR and need to correct it to claim the HCTC for 2014, file a new one  and write “Corrected” across the top of page one according to the form instructions. 

Form 1040-SS and Form 1040-PR including the HCTC for 2014 cannot be filed electronically; they must be filed on paper. Enter the amount of the HCTC in the grayed out box at line 10 of Form1040-PR or Form 1040-SS. Make the election required for the HCTC near line 10. 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.”

You must also attach Form 8885 and 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. (Refer to Q&A #6)

Mail the completed 2014 Form 1040-SS or 1040-PR, Form 8885, and supporting documents 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

See IRS Notice 2016-02 for more information, including questions and answers about specific situations.

Page Last Reviewed or Updated: 04-Jan-2016