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Health Coverage Tax Credit (HCTC)

The Health Coverage Tax Credit (HCTC) is a program that helps pay for private health
insurance for workers certified to receive Trade Adjustment Assistance (TAA) benefits. The
Internal Revenue Service (IRS) administers this plan.

 

The program provides two benefit options. Eligible workers may claim a tax credit on their
federal income tax return of 65% of their monthly insurance premiums paid during the year.
Alternatively, beginning in August 2003, eligible workers may claim an advance credit. Under
this option the worker would pay 35% of their monthly insurance premium and the federal
government would pay the remaining 65% of the premium each month.

 

To be eligible, workers must be:

  1. covered by a TAA certification;
  2. receiving Trade Readjustment Assistance (TRA) benefits or
    receiving unemployment benefits and eligible to receive TRA
    once they exhaust their unemployment benefits;
  3. enrolled or participating in a TAA training program, have
    completed a TAA training program or have obtained a TAA
    training waiver; and
  4. have a qualified health insurance plan, such as a COBRA plan.

 

This Department will notify the IRS’ HCTC office of all eligible TAA recipients. The HCTC will
issue a packet to these eligible workers containing the instructions and forms needed to
participate. The HCTC office will handle the monthly advance credit payments. This
Department will issue Form 8887s at the end of the year to eligible workers for use in claiming
the tax credit on the federal income tax return.

 

A booklet containing more information is available at your local Career Center or unemployment
claims office. Additional information may also be obtained by calling the HCTC office at 1-866-
628-HCTC (1-866-628-4282) or on the Web at http://www.irs.gov (keyword HCTC).
TDD/TYY callers should call 1-866-626-HCTC (1-866-626-4282)..