Form 8885, just got notified I'm eligible for Trade Act Assistance. I have qualifying expenses in a prior tax year (2017). How do I file those? amended return for 2017?

[BMcCalpin · Accepted solution]

You can elect to take the HCTC only if (a) you were an eligible TAA, ATAA, or RTAA recipient or PBGC payee in 2017. But please read the Special Instructions on page 1 of the Instructions for Form 8885 - in most cases, you have to already be receiving benefits to qualify for this special treatment. https://www.irs.gov/pub/irs-pdf/i8885.pdf

Also read the 2017 IRS page (see "Proof of Eligibility") where you have to have received "[a]n official letter reflecting that you were an eligible individual for the months claimed in 2017". See https://www.irs.gov/credits-deductions/individuals/claiming-2017-hctc

If you pass these eligibility tests, then, yes, you would amend your 2017 return.

[dynatone6453]

Thank you so much! Does this end up being a dollar-for-dollar return (credit)? trying to gauge the effort vs. the $ for doing the amended return. thanks!

[BMcCalpin]

Sort of. The IRS says, "The Health Coverage Tax Credit (HCTC) is a refundable tax credit that pays 72.5% of qualified health insurance premiums for eligible individuals and their families. Taxpayers may elect to receive the credit through their federal tax return or through advance monthly payments paid directly to their Health Plan Administrator." Still, it appears that it might be a substantial amount, depending on your premiums.

[dynatone6453]

Thanks again! One other question . . . My involvement was over a calendar year change. . . for instance, I paid for January coverage in December . . . it looks like I'm reporting the months covered, not when the payment for that month was made (even if made in a prior tax year)? Thanks