Health Coverage Tax Credit (HCTC)
Qualified taxpayers have the ability to get reimbursable credit that is part of the qualified health insurance health insurance coverage. This credit is referred to as the Health Coverage Tax Credit.
A taxpayer is eligible for HCTC if:
- They qualified for Trade Adjustment Assistant (TAA) recipient, reemployment TAA (RTAA) recipient, Alternative (ATAA) recipient, or Pension Benefit Guaranty Corporation (PBGC) payee through the tax year, or they were the family member who was qualified eligible TAA, ATAA, or RTAA recipient or PBGC payee who died or divorced them.
- Their insurance was from an HCTC-qualified health insurance coverage for which they either paid the whole premiums, or their part of the premiums directly to their health plan or to “US Treasury-HCTC”
- They were either signed up for medicare but their family members were qualified for for the HCTC or never enrolled for Medicare Part A, B, or C.
- They never enrolled for Medicaid, the Federal Employees Health Benefits Program (FEHBP), the Children’s Health Insurance Program (CHIP), or they were eligible for benefits under the U.S. military health system (TRICARE)
- They have never been imprisoned.
- Either the taxpayer’s employer (including former employer) or their spouse never paid at least 50% of the cost of coverage.
- They are not dependents anywhere.
Eligibility for Health coverage tax credit is determined monthly. Information on eligibility is found in Form 8885 which also computes the credit based on the premiums paid for health insurance coverage.
A taxpayer can either:
- Sign up with the Treasury department, pay 20% of the health insurance premium every month. The remainder is settled by the IRS.
- Pay the whole amount of the health insurance premiums then use Form 8885 to claim the credit on their annual income tax return.
To enter the Health Coverage Tax Credit on the Taxx Savage Pro:
- Go to the Main Menu of the tax return (Form 1040)
- From the menu, select Payments, Estimates & EIC
- Then Health Coverage Tax Credit
- For MFJ Returns - Show whether the credit is for the taxpayer or the spouse
- Answer YES or NO to the coverage question then fill the rest of the information as required
Additional Information: