topic Health Coverage Tax Credit in Retirement tax questions

Health Coverage Tax Credit

MarkJHwatson — Mon, 09 Mar 2026 09:10:51 GMT

My wife gets her health insurance paid by her pension plan. It is directly deducted from what she receives each month. Does that qualify as health Coverage Tax Credit. Can I use those monthly receipts as proof ?

Re: Health Coverage Tax Credit

MayaD — Fri, 04 Mar 2022 14:59:51 GMT

The Health Coverage Tax Credit (HCTC) was a federal tax credit administered by the IRS for 72.5 percent of health care insurance premiums. HCTC may have applied to certain individuals at least 55 and up to 65 years of age which are receiving benefits from PBGC

Eligible for the HCTC if you are:

An eligible trade adjustment assistance (TAA) recipient, alternative TAA (ATAA) recipient, or reemployment TAA (RTAA) recipient
An eligible Pension Benefit Guaranty Corporation payee
The family member of an eligible TAA, ATAA, or RTAA recipient or PBGC pension payee who is Medicare eligible, deceased, or who finalized a divorce with you.

Not eligible for the HCTC if you:

Can be claimed as a dependent on another person’s federal income tax return; or,
Are enrolled in benefits under Medicare, Medicaid, the Children’s Health Insurance Program, the Federal Employees Health Benefits Program or eligible to receive benefits under the U.S. military health system.

For Records and Eligibility Documentation: a copy of the official letter from the PBGC stating you received a benefit paid by the PBGC or a copy of Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, from the PBGC showing you received a benefit paid by the PBGC.

Health Coverage Tax Credit

Re: Health Coverage Tax Credit

MarkJHwatson — Sun, 06 Mar 2022 17:02:09 GMT

Yes and No

My wife is 54 she had to retire early and needed to draw from her pension from UC Davis / Federal Government. She gets a total of 7500 and most of that pays for her health insurance. Is there a way to deduct that ammount she pays towards her insurance?

Re: Health Coverage Tax Credit

DoninGA — Sun, 06 Mar 2022 17:09:39 GMT

@MarkJHwatson wrote:

Yes and No

My wife is 54 she had to retire early and needed to draw from her pension from UC Davis / Federal Government. She gets a total of 7500 and most of that pays for her health insurance. Is there a way to deduct that ammount she pays towards her insurance?

Health care insurance premiums and other medical expenses that you paid with out of pocket funds are an eligible medical expense that you can deduct using Schedule A for itemized deductions. However, only your total medical expenses that are greater than 7.5% of your Adjusted Gross Income (AGI) can be deducted. Your total itemized deductions reported on Form 1040 Schedule A must be greater than the standard deduction for your filing status to have any tax benefit.

Standard deductions for 2021

Single - $12,550 add $1,700 if age 65 or older
Married Filing Separately - $12,550 add $1,350 if age 65 or older
Married Filing Jointly - $25,100 add $1,350 for each spouse age 65 or older
Head of Household - $18,800 add $1,700 if age 65 or older

To enter your medical expenses -

Click on Federal Taxes (Personal using Home and Business)
Click on Deductions and Credits
Click on I'll choose what I work on (if shown)
Scroll down to Medical
On Medical Expenses, click the start or update button

Or enter medical expenses in the Search box located in the upper right of the program screen. Click on Jump to medical expenses