Health Coverage Tax Credit (HCTC) Advance Payments

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Instructions for Form 1099-H

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2007

Department of the Treasury
Internal Revenue Service

Instructions for Form 1099-H
Section references are to the Internal Revenue Code unless
otherwise noted.

Reminder
In addition to these specific instructions, you should also use
the 2007 General Instructions for Forms 1099, 1098, 5498, and
W-2G. Those general instructions include information about:
• Backup withholding
• Electronic reporting requirements
• Penalties
• Who must file (nominee/middleman)
• When and where to file
• Taxpayer identification numbers
• Statements to recipients
• Corrected and void returns
• Other general topics
You can get the general instructions from the IRS website at
www.irs.gov or by calling 1-800-TAX-FORM (1-800-829-3676).

Specific Instructions for Form 1099-H
File Form 1099-H, Health Coverage Tax Credit (HCTC)
Advance Payments, with the IRS by February 28, 2008,
(March 31, 2008, if you file electronically) if you received in the
course of your trade or business any advance payments during
the calendar year of qualified health insurance payments for the
benefit of eligible trade adjustment assistance (TAA), alternative
TAA, or Pension Benefit Guaranty Corporation (PBGC)
recipients and their qualifying family members.

Who Must File
Section 6050T requires that if you are a provider of qualified
health insurance coverage (section 35(e)) you must file Forms
1099-H with the IRS reporting the advance payments that you
receive from the Department of the Treasury on behalf of
eligible individuals. You must also furnish a statement to the
eligible recipient.
However, Notice 2004-47, which is on page 48 of Internal
Revenue Bulletin 2004-29 at www.irs.gov/pub/irs-irbs/irb04-29.
pdf, provides that the HCTC Transaction Center, as an
administrator of the Health Coverage Tax Credit (HCTC), will
file the required returns and furnish statements to the recipients
unless you elect to file and furnish information returns and
statements on your own. Contact the HCTC Transaction Center
for this purpose by calling 1-866-628-4282. Unless you notify
the HCTC Transaction Center of your intent to file information
returns and furnish statements, you will be considered to have

elected to have the Transaction Center file Form 1099-H and
furnish statements to recipients in satisfying section 6050T filing
requirements.

Statements to Recipients
If you are required to file Form 1099-H, a statement must be
furnished to the recipient. You or the Transaction Center, if
elected, must furnish a copy of Form 1099-H or an acceptable
substitute statement to each recipient. Also, see part M
in the 2007 General Instructions for Forms 1099, 1098, 5498,
and W-2G.

Penalties
Waiver of penalties. Section 6724(a) authorizes the IRS to
waive any penalties under sections 6721 and 6722 for failure to
comply with the reporting requirements of section 6050T if such
failures resulted from reasonable cause and not willful neglect.
If you elect to allow the HCTC Transaction Center to file and
furnish Forms 1099-H, the IRS will not assert the penalties
imposed by sections 6721 and 6722 regarding the reporting of
advance payments made to you. If you do not elect to allow the
HCTC Transaction Center to file and furnish Forms 1099-H, the
general rules for seeking a penalty waiver under section
6724(a) apply. See Regulations section 301.6724-1.
For more information on penalties, see part O in the 2007
General Instructions for Forms 1099, 1098, 5498, and W-2G.

Box 1. Amount of HCTC Advance Payments
Enter the total amount of advance payments of health
insurance premiums received on behalf of the recipient for the
period January 1, 2007, through December 31, 2007. The
amount received cannot exceed 65% of the total health
insurance premium for the individual.

Box 2. No. of Months HCTC Advance Payments
Received
Enter the number of months for which payments were received
on behalf of the recipient. This number cannot be more than 12.

Boxes 3-14. Amount of Advance Payment(s)
Included in Box 1
Enter the amount of the advance payment received for each
month in the applicable box. You may receive these payments
prior to the month for which they are paid. Be sure to enter the
amounts in the correct box.

Cat. No. 35080G