Interim Process for Making Advance Monthly Payments of the HCTC


Notice: Historical Content

This is an archival or historical document and may not reflect current law, policies or procedures.

May 26, 2016

The IRS expects to be able to make advance monthly payments of the Health Coverage Tax Credit to some individuals beginning in mid-summer 2016 using a limited interim process. The innovative process relies on significant assistance from participating Health Plan Administrators or Third Party Administrators, and it will allow the IRS to make payments in 2016. This solution can help many taxpayers.

The interim process will only be available to individuals for months they are enrolled in qualified health coverage working with their Health Plan Administrator or a Third Party Administrator that is willing to meet certain IRS requirements. The IRS will work with any Health Plan Administrator or Third Party Administrator that is willing to meet these requirements and is willing to sign a Memorandum of Understanding with the IRS to receive advance monthly payments of the HCTC on behalf of eligible individuals in 2016 using this interim process.

However, if an individual does not have insurance through a participating HPA or is not working with a participating TPA, unfortunately, the IRS cannot make a payment on behalf of that individual in 2016.

The IRS continues to work with its partners to ensure that all eligible taxpayers have the opportunity to benefit from this important credit and still expects to fully implement the advance monthly payment program in January 2017.

While we were able to process the 2014 and 2015 yearly claims for the HCTC with the tax return, the IRS did not have the resources to put in place the full advance monthly payment program in 2016, which requires systems and processes that are separate from those used to process tax returns. With the expiration of the previous HCTC legislation, all systems and processes were terminated and the associated program funding expired in 2014. The IRS realizes the importance of this program, and worked closely with plan and third party administrators to come up with a special effort to allow for the advance monthly payments in 2016. The IRS appreciates the help and feedback of these groups to come up with this solution.

The IRS has a special web page with information related to HCTC.