HCTC Elgibility

[mwoodward3]

I receive a pension from the PBGC and should qualify for the HCTC but I'm not completely sure. I receive health insurance from my wife's family plan and she pays 100% of the added premiums needed to cover me..i.e. Her pension plan does not subsidize any part of the coverage for me.  But, the part I'm not sure about is the premiums are paid pre-tax from her pension payments. The instructions make it sound like if any part of the premium payments are pre-tax payments, no matter how much, it make me ineligible for the HCTC. Anyone else had experience with HCTC and pre-tax insurance payments?

[BillM223]

You are correct to be concerned since any pre-tax premiums are indeed not allowed for the HTCT.

"the part I'm not sure about is the premiums are paid pre-tax from her pension payments."

The problem is that we in the Community have no way to know if the premiums paid for your health insurance are pre-tax or not. Does your wife's pension cover her health insurance premiums? If they are listed in box 5, then they are tax-free.

However, are your premiums also listed as part of box 5? I could well imagine that there is a separate worksheet that comes with the 1099-R that shows your premiums coming out of the distribution in box 1 and is included in box 2a as taxable.

But we have no way of knowing. Please call her pension administrator and ask if your payment is pre-tax or not.

Sorry not to have a more concrete answer.

[mwoodward3]

My problem is I did ask and received an email stating the premiums are pre-tax. Unfortunately, I see alot of evidence to support my thought they are post-tax. The source has not been reliable in the past and I'm skeptical of the answer they gave. I know that the working people have their premiums removed pre-tax but the retirees are different. I'm wondering if the pre-tax premium payment is part of the FSA for workers? Retirees don't qualify for that so that would explain why they are taxed differently.

To answer your question, Box 5 of the 1099-R is empty. Box 1 and box 2a are the same and are correct for her monthly pension amount x 12.

Thoughts? Anyway to prove this to the IRS?

Thanks for helping out

Mark

[DaveF1006]

As BillM223 has already said, we have no way of knowing if these were from pre-tax or post-tax contributions. You would need a statement of fact from the plan's administrator in order to know for sure if pre-tax or post-tax. At this juncture, we could not advise you one way or another on how to prove to the IRS that this is post tax. You would need a statement of fact to keep with your tax return in case if the IRS inquires about the credit. Just remember in order to claim, the payment must be made from post-tax dollars.