The Health Coverage Tax Credit (HCTC), a Federal tax credit administered by the IRS, has been extended for months beginning after December 31, 2019 through December 31, 2020. This means participants will receive a credit that they can use to offset the cost of their health coverage.
The IRS sent a letter in October 2019 advising participants to seek alternative insurance options due to the impending legislation expiration. As a result, they were removed from HCTC qualified provider plans.
Participants are now able to work with their vendors/providers to be placed back on HCTC qualified plans. Although the IRS is sending a new letter to 2019 participants, there may be a delay in receipt.
- Individuals who choose to participate in the HCTC Advance Monthly Program must submit Form 13441-A, HCTC Monthly Registration and Update and provide appropriate supporting documentation to enroll. If you were previously enrolled, submit a new form to re-enroll with the 2020 insurance rates. Claiming the Health Coverage Tax Credit provides more information and instructions.
- The IRS began processing Forms 13441-A on January 15, 2020.
- Individuals should continue to pay their insurance provider directly until they receive Letter 4545 confirming their 2020 Advance Monthly Program payment amount.
- Payments paid directly to the vendor/provider may be eligible for reimbursement:
- Enrolled participants may request reimbursement for current year payments by using Form 14095 once they have submitted a payment through the program, or may claim reimbursement as a credit on their annual federal tax return by using Form 8885, Health Coverage Tax Credit.
- Individuals who choose not to enroll, or those with vendors who are not participating in the program, may be eligible to claim Form 8885 on their annual federal tax return instead.
As mentioned above, the IRS will be sending a letter to all participants enrolled in 2019.
Eligibility for the HCTC is restricted to the following groups of individuals:
- Individuals eligible for Trade Adjustment Assistance (TAA) 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, 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, 2021. Affected individuals should monitor this page for news and updates.