Note from OKC APA: This information can be game changing for small employers who have employees that receive the HCTC benefit.
Qualified taxpayers are eligible to receive the benefit of the Health Coverage Tax Credit (HCTC) on an advance monthly basis during 2017. The IRS established a new registration and enrollment process where eligible taxpayers can have 72.5 percent of their qualified health insurance premiums paid in advance directly to their health plan administrator each month. Each payment made on their behalf to the health plan administrator lowers their out-of-pocket premium costs.
Taxpayers may be eligible to elect the HCTC only if they are one of the following:
• An eligible trade adjustment assistance (TAA) recipient, alternative TAA recipient or reemployment TAA recipient,
• An eligible Pension Benefit Guaranty Corporation (PBGC) 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 them.
Taxpayers who 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) are not eligible for the HCTC.
Qualified taxpayers who don’t request advance monthly payments and instead pay 100 percent of their health insurance premiums in 2017, can claim their HCTC when they file their federal income tax return in 2018. This will increase their refund or lower the amount of tax that they would otherwise owe.
Registering for the 2017 advance monthly payments
Taxpayers must register with the IRS and provide required information to participate in the 2017 Advance Monthly Payment program for the HCTC. This includes completing and mailing Form 13441-A, HCTC Monthly Registration and Update, with all required supporting documents to the IRS.
They must provide required supporting health plan documents with their registration.This includes a copy of their health insurance bill dated within the last 60 days that includes all of the following:
• Monthly premium amount
• Dates of coverage
• Health Plan Administrator name and phone number
• Health plan identification numbers
• Address for mailing your payments
Usually, your health insurance bill will have all of this information on it. If it does not, you will need to contact your Health Plan Administrator for a letter or another document that includes this information.
Important: Taxpayers should confirm with their Health Plan Administrator that the health plan meets the IRS requirements to receive payments through the Direct Deposit Program. Participating Health Plan administrators must file Form 3881: ACH Vendor/Miscellaneous Payment Enrollment Form with the IRS before they can receive payments.
Making 2017 advance monthly payments
Once the registration is complete and they are enrolled in the Advanced Monthly Payment HCTC program, the IRS will mail the taxpayer a letter acknowledging their enrollment and confirming the 27.5 percent monthly payment amount for their portion of the premium. The letter will include instructions for making the monthly payment.
The taxpayer must pay 27.5 percent of their health insurance premiums in advance to the HCTC program. Payments are due by the 10th day of each month.
Follow these steps to make the monthly premium payment to the AMP HCTC program:
• To ensure we apply your payment correctly and timely, taxpayers must mail the fillable Form 13973, Health Coverage Tax Credit Blank HCTC Payment Coupon each month with their payment.
• Include the bottom portion of the HCTC payment coupon with the payment. Failure to provide all required information could delay processing of the payment or the return of the payment if, after research, the IRS cannot verify payment posting.
• The AMP HCTC program accepts the following payment methods by mail: personal check, business check, certified check, cashier's check, and money order payable to US Treasury – HCTC.
• Include the HCTC Participant Identification Number on the payment and mail it to the address on Form 13973.
The AMP HCTC program adds the 72.5 percent advance portion of the HCTC to your payment amount and sends the full payment to your health plan administrator each month.
For more information, including a helpful set of questions and answers, visit IRS.gov/HCTC.