Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments

Form 1099-H, Health Coverage Tax Credit (HCTC) Advance Payments

Form 1099-H is an important IRS Form that is used to report different non-employee transactions and payments. This IRS Form is used to report advanced payments, health insurance payments, and benefits-eligible trade adjustment assistance. This Form is also used to report pension benefit guarantee corporation, alternative TAA, re-employment TAA that benefits both payees and their qualifying family members. 

Who should use Form 1099- H?

The Recipient of TAA, RTAA, ATAA, PBGC benefits are eligible to avail of health coverage tax credit, and this helps them in lowering their health insurance premiums. You will receive Form 1099-H if your insurance received advance payments on your behalf. Such advance payments will help you to pay your monthly health insurance premiums and are thus considered taxable by the IRS. 

Thus, the providers of the qualified health insurance coverages that make use of advance payments from the Department of Treasury, on behalf of the recipients should use this form to report their payments with the IRS. Recipients of the health coverage tax credit will get a copy of Form 1099- H. 

Who is eligible to get HCTC?

The health coverage tax credit will help families and individuals lower their monthly health insurance premiums. People who are eligible for HCTC are,

  • Recipients of ATAA or RTAA, 
  • Those who are eligible for TAA allowances, owing to qualifying job loss, 
  • Those who are between the age of 55 and 64 age and the defined benefit pension plan was taken over by the Pension Benefit Guaranty Corporation.

Who are not eligible for receiving HCTC:

  • Those who claim as a dependent on someone else’s federal IT returns are not eligible for HCTC
  • If you are enrolled in Medicare, Medicaid, or any other Children’s health insurance programs or any form of Federal Employees health benefit programs, then you are not eligible to receive the benefits.
  • If you are enrolled under any form of insurance scheme, that comes under the Affordable Care Act.

About Form 1099-H Health Coverage Tax Credit Advance Payments

The left side of the Form gives information about the issuer, which is the health insurance company and the recipient or the taxpayer. It gives information about the names, addresses, and TIN of the taxpayer. The right side of the Form gives information on the HCTC advance payments at Box 1, reimbursement credits at Box 2. From Boxes 3 to 14, the Form gives information on the amount of HCTC advance payments that the taxpayer paid for every single month of the year.

As a participant of HCTC, you can either choose to pay part of your health insurance premiums to the HCTC program every month. The HCTC program will in turn add the remaining balance and send the complete payment to your health plan. Alternatively, you can also choose to make full payments to your health plan every month, and receive HCTC as a yearly tax credit.