Health Coverage Tax Credit is a federally funded program designed to assist people certified as displaced workers by the United States Department of Labor, and those who are over 55 years old and receive benefits through the Pension Benefits Guaranty Corp. The HCTC covers a significant part of the participants' health insurance premiums, enabling vulnerable sectors of the workforce to maintain their health cover. The benefits of the program have been modified and extended several times.
To apply for HCTC, you must be a qualified beneficiary of a qualified trade adjustment assistance program, which is currently within a range approved by such training or receive unemployment insurance in place of training. You can also qualify if you are 55 and a beneficiary of PBGC.
Qualified family members of a deceased person eligible for HCTC are also eligible for the credit. In addition to the applicant's requirements, general requirements must be met, such as applying for a qualified health plan, paying more than 50% of the premiums, and the employee's failure to comply with the federal income tax return from another person.
Part I of Form 8885 shows the months of the fiscal year declared by the HCTC. In Part II, report the total amount paid directly to your qualified health insurance provider, omitting premiums paid directly to the HCTC program, advances or refunds received, or premiums paid through a national emergency grant. Supporting documents for the amounts requested for Form 8885 must accompany the declaration. Otherwise, the request may be rejected.
The HCTC, a federal tax credit managed by the IRS, has been extended to every month of coverage starting in 2020. This means that eligible people can receive a tax credit to offset the costs of their monthly health insurance premiums for 2020 if you have HCTC qualified medical coverage. A qualified health plan offered through a health insurance market is not qualified coverage for the HCTC.
In October 2019, a letter was sent to participants in the HCTC Advanced Monthly Program to seek other insurance options due to the impending expiration of the HCTC Act in late 2019. All participants were then removed from the HCTC advanced monthly program.
With the HCTC 2020 extension, participants can work with their providers to return to eligible HCCCC health coverage and re-enrol in the HCTC Advanced Monthly Program or to apply for HCTC in the annual federal income tax return filed next year.
The participant's next steps for re-enrollment into the HCTC Advanced Monthly Program:
• Individuals must pay the full premium amount directly to their insurers until they receive the HCTC approval letter confirming the payment amounts for the 2020 advanced monthly program.
• Individuals previously enrolled in the HCTC Advanced Monthly Program must submit a new Form 13441-A, HCTC Monthly Registration and Update, to re-enrol in 2020 and provide all necessary documents, including a copy of health insurance that reflects their insurance rates for 2020.
• Registered participants can request a 72.5% reimbursement of payments paid directly to the provider for qualified health care coverage for 2020 using form 14095. HCTC reimbursement request, after submitting a program payment or if you can claim a refund for the federal annual report return using Form 8885, Health Coverage Tax Credit.
Individuals who decide not to enroll in the HCTC Advanced Monthly Program or those enrolled in providers who do not participate in the program may receive a 72.5% refund of payments to qualify for 2020 in your programs. 8885 annual federal tax return, health care tax credit As mentioned above, the IRS will send a letter to all participants registered in 2019.
Eligibility for HCTC is limited to the following groups of people:
• Persons aged 55 to 64 whose defined benefit pension plans have been taken over by the Pension Benefit Guarantee Company
• Persons eligible to receive Trade Adjustment Assistance (TAA) due to the loss of qualified jobs.
You may be eligible to choose HCTC only if you are one of the following:
• An eligible beneficiary of the Pension Benefits Guarantee Company
• Eligible reemployment TAA recipient, alternative TAA recipients, or Trade Adjustment Assistance recipients.
• A family member of an eligible TAA, ATAA, or RTAA beneficiary or a PBGC beneficiary who is deceased or divorced.
You are not eligible for HCTC if:
• Can be claimed on another person's federal income tax return or as a dependent.
• You are enrolled in Medicare, Medicaid, the Children's Health Insurance Program, or the Federal Health Benefits Program or are eligible to receive benefits in the US military health system.
• You are enrolled in an accessible care act marketplace insurance.
The HCTC program will expire on December 31, 2020.
Don Bell Law