Health Coverage Tax Credit

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Health Coverage Tax Credit

Postby sgaeth » Thu Jan 24, 2019 1:18 pm

I recieved my 1099R from State Street Retiree Services for USPBGC -Avaya Inc PP for Salaried EES. Does anyone know if this is sufficient proof to claim HCTC for the months that Avaya was paying pensions for the PBCG? Thanks
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Re: Health Coverage Tax Credit

Postby ahretirement » Thu Jan 24, 2019 1:54 pm

The 1099R that you received is from the PBGC for the 7 month period that they actually made your payments. Pension payments made by Avaya for the first 6 months will come on another 1099R from Alight Solutions BPS. You should read the IRS instructions for Form 8885 carefully: These are available online. It will let you know what you need to submit with your tax return to claim the HCTC tax credit. Since I haven't been able to get any ruling from IRS about the first 5 months of 2018 when the PBGC was the trustee of our pension plan but Avaya was still making the payments, I am not going risk taking the credit for those first 5 months. As you will see in the instructions, you will need to submit proof that you made payments for private health coverage. Obamacare (ACA) does NOT count. I hope this helps.

John Lawrence
Avaya Retiree from 2001
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Re: Health Coverage Tax Credit

Postby tomindenver » Sat Jan 26, 2019 9:46 am

I just looked at the 2018 instructions for Form 8885 at https://www.irs.gov/pub/irs-pdf/i8885.pdf. Here is a cut and paste from it on Page 5 under the heading "Required Documents":

All health plans. For all health plans, you must include all of the following documents.
1. An official letter reflecting that you were an eligible individual for the months claimed on line 2 in 2018.
• For trade certified individuals demonstrating TAA, ATAA, or RTAA eligibility—A copy of the official letter from the Department of Labor, your state workforce agency, or employment office stating you are eligible for trade adjustment benefits.
• For PBGC eligibility—A copy of the official letter or a copy of your 2018 Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., from the PBGC showing you received a benefit paid by the PBGC.
2. A copy of your health insurance bills or COBRA payment coupons for each month you are claiming the credit on
line 2.* The bills must have:
a. Your name (or name of the policy holder),
b. The name of your health plan,
c. Your monthly premium amount,
d. Dates of coverage, and
e. Your health plan identification number(s).
*If your health plan doesn’t provide members with an insurance bill or COBRA payment coupon, you must provide health plan enrollment documents or an official letter from your health plan that has the required information listed under items 2a through 2e above. If your monthly premium includes amounts that don’t count towards the HCTC, such as dental or vision coverage or coverage for family members who aren’t eligible for the HCTC, your documentation also must specify those ineligible amounts.
3. Proof of payment for each month you are claiming the credit on line 2 such as:**
a. Canceled checks (copy of front and back),
b. Bank statements,
c. Credit card statements, or
d. Money orders.
**Your proof of payment must indicate the amount paid and to whom it was paid. If you don’t have one of these types of proof of payment, contact your health plan for a record of your payment(s).

So yes, the 1099-R is one piece of proof.

Tom Vicker
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Health Coverage Tax Credit

Postby schrystone » Fri Feb 01, 2019 5:19 pm

Hi and thank you for all the information and assistance,

Is anyone using Turbotax to get the Health Care Tax Credit? I can't figure out how and where the 8885 form is available to fill in any data. I'm also assuming that this credit doesn't apply to my wife's portion of the premiums for the 7 months PBGC was paying us. I'm assuming that we are not entitled to a credit for our spouses, even though it's a joint survivor pension. Any suggestions , other than getting a good accountant, would be welcome.

Thanks,

Steve Chrystone
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Re: Health Coverage Tax Credit

Postby ahretirement » Sat Feb 02, 2019 8:57 am

In TurboTax just go to the search box and enter "health coverage tax credit". Then select the link that says "jump to health coverage tax credit" and you will be able to enter your information.
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Re: Health Coverage Tax Credit

Postby sgaeth » Tue Feb 05, 2019 1:34 pm

Is Form 8885 the only form required for your tax return to receive the HCTC other than all the documentation required for the form?
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Re: Health Coverage Tax Credit

Postby schrystone » Wed Feb 06, 2019 7:37 am

Hi,

Looking for some advice. I opted for a lower monthly amount as my spouse is part of the survivor benefit. When filing taxes, are we both eligible for HCTC or do I separate her portion out of medical premium paid and claim it under medical expenses as I've done in the past.
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Re: Health Coverage Tax Credit

Postby tomindenver » Wed Feb 06, 2019 9:16 am

Regarding form 8885, when I filled out a return using TurboTax its the only form I saw dealing with HCTC. The safest thing, in my opinion, is to use tax software like TurboTax or H&R Block.

Regarding eligibility of HCTC, below is a cut and paste from the IRS page at https://www.irs.gov/credits-deductions/individuals/hctc.

Eligibility
Eligibility for the HCTC is restricted to the following groups of individuals:

Individuals eligible for Trade Adjustment Assistance (TAA) allowances because of a qualifying job loss
Individuals between 55 and 64 years old whose defined-benefit pension plans were taken over by the Pension Benefit Guaranty Corporation (PBGC)
You may be eligible to elect the HCTC only if you are one of the following:

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