Health coverage tax credit Form 8885
The health coverage tax credit is a program in place for tax years from 2002 to 2013 and was later extended through 2019 to help eligible individuals and families by paying a portion of premiums for qualified health insurance programs. Note Form Available in (Go to www.irs.gov/ScheduleA for instructions and the latest information. ▶ Attach to Form 1040 or 1040-SR).
Who is eligible for health coverage tax credit?
To be eligible for the premium tax credit, your household income must be at least 100 percent and, for years other than 2021 and 2022, no more than 400 percent of the federal poverty line for your family size, although there are two exceptions for individuals with household income below 100 percent of the applicable
Using Form 8885
Part I of form 8885 establishes which months in the tax year you claim the HCTC. In part II you declare the total amount you paid directly to your qualified health insurance provider, omitting any premiums paid to the HCTC program directly, any advance payments or reimbursements you received or premiums paid through a national emergency grant. Supporting documents for amounts claimed for form 8885 must accompany your return, or your claim may be disallowed.
U can get 8885 form Go to www.irs.gov/Form8885 for instructions and the latest information.
Claiming the HCTC and PTC
You cannot claim the Health Coverage Tax Credit (HCTC, Form 8885) and the Premium Tax Credit (PTC, Form 8962) for the same coverage for the same month
All premiums qualify for both HCTC and PTC
Enter the premiums paid, including any Advance Premium Tax Credit, in the Qualified health insurance payments field on the 8885 screen and enter X in the Claiming HCTC (Form 8885) for all premiums field on the PTC screen.
Some premiums qualify for both HCTC and PTC
If only a portion of the premiums in the 1095A or PTC screen are included as qualified premiums on Form 8885, enter only the portion of the premiums that are not HCTC qualified premiums in the 1095A or PTC screen. For example, an eligible taxpayer can claim the PTC for January through September and then elect the HCTC for October through December. Enter premiums in the 1095A screen for January through September. If advance payments were made, enter the advance payments for the applicable months in January through December. Enter the total premiums paid for October through December in the Qualified health insurance payments field on the 8885 screen.
Note: If you are filing Form 8885, Health Coverage Tax Credit, and Form 8962, Premium Tax Credit, and the taxpayer received excess advance HTCTC payments, then review the Excess Advance HCTC cv
Taxpayer and spouse elect different credits
If there are separate health care policies and (for example) the taxpayer elects HCTC for his coverage and the spouse elects PTC for her separate coverage, then the repayment limitation would apply to the spouse’s coverage. Enter premiums, SLCSP premiums, and advance payments for the spouse in the 1095A screen. Enter only the advance payments for the taxpayer in the 1095A screen. The IRS has not provided any guidance on how this repayment limitation should be calculated if both the taxpayer and spouse received advance payments of the Premium Tax Credit. UltraTax CS will apply the limitation from the Form 8962 instructions. If you need to change the limitation, use the Repayment limitation (Force) field in Screen PTC.
Repayment Worksheet in the instructions for Form 8885 to determine any required adjustment for Form 8885, line 5
Advance premium tax credit (APTC)
A tax credit you can take in advance to lower your monthly health insurance payment (or “premium”). When you apply for coverage in the Health Insurance Marketplace®, you estimate your expected income for the year. If you qualify for a premium tax credit based on your estimate, you can use any amount of the credit in advance to lower your premium.
⦁ If at the end of the year you’ve taken more premium tax credit in advance than you’re due based on your final income, you’ll have to pay back the excess when you file your federal tax return.
⦁ If you’ve taken less than you qualify for, you’ll get the difference back.