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What is the Health Coverage Tax Credit?

SOLVEDby TurboTax264Updated December 29, 2021

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. If you qualify for HCTC, it’s claimed on Form 8885.

To qualify for this credit, one of the following must be true:

  • You're eligible for the Trade Adjustment Assistance (TAA) program and received a Trade Readjustment Allowance (TRA) or were entitled to receive a TRA, except you hadn’t exhausted your unemployment insurance
  • You received benefits under the Alternative Trade Adjustment Assistance (ATAA) program
  • You received benefits from the Reemployment Trade Adjustment Assistance (RTAA) program
  • You received pension benefit payments from the Pension Benefit Guarantee Corporation (PBGC) and be between 55 and 64 years old

You are not eligible for the HCTC if you:

  • Can be claimed as a dependent on another person’s federal income tax return
  • 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)
  • Purchased health insurance through Healthcare.gov or a state Marketplace

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