Form 8885 Health Coverage Tax Credit

Form

8885

Department of the Treasury
Internal Revenue Service

Health Coverage Tax Credit
▶

OMB No. 1545-0074

2013

Attach to Form 1040, Form 1040NR, Form 1040-SS, or Form 1040-PR.

▶ Information

Attachment
Sequence No. 134
Recipient’s social security number

about Form 8885 and its instructions is at www.irs.gov/form8885.

Name of recipient (if both spouses are recipients, complete a separate form for each spouse)

Before you begin: See Definitions and Special Rules in the instructions.

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Do not complete this form if you can be claimed as a dependent on someone else’s 2013 tax return.

Part I

Complete This Part To See if You Are Eligible To Take This Credit

CAUTION

1

Check the boxes below for each month in 2013 that all of the following statements were true on the first day of that month.
• You were an eligible trade adjustment assistance (TAA) recipient, alternative TAA (ATAA) recipient, reemployment TAA (RTAA)
recipient, or Pension Benefit Guaranty Corporation (PBGC) pension payee; or you were a qualified family member of an
individual who fell under one of the categories listed above when he or she passed away or with whom you finalized
a divorce.
• You and/or your family member(s) were covered by a qualified health insurance plan for which you paid the entire premiums,
or your portion of the premiums, directly to your health plan or to “U.S. Treasury–HCTC.”
• You were not enrolled in Medicare Part A, B, or C, or you were enrolled in Medicare but your family member(s) qualified for
the HCTC.
• You were not enrolled in Medicaid or the Children’s Health Insurance Program (CHIP).
• You were not enrolled in the Federal Employees Health Benefits Program (FEHBP) or eligible to receive benefits under the
U.S. military health system (TRICARE).
• You were not imprisoned under federal, state, or local authority.
• Your employer did not pay 50% or more of the cost of coverage.
• You did not receive a 65% COBRA premium reduction from your former employer or COBRA administrator.
January
July

Part II
2

February
August

March
September

April
October

May
November

Health Coverage Tax Credit

Enter the total amount paid directly to your health plan for qualified health insurance coverage for
the months checked on line 1 (see instructions). Do not include on line 2 any qualified health
insurance premiums paid to “U.S. Treasury–HCTC” or any insurance premiums on coverage that
was actually paid for with a National Emergency Grant. Also, do not include any advance
(monthly) payments or reimbursement credits you received as shown on Form 1099-H, box 1 . .
You must attach the required documents listed in the instructions for any amounts
included on line 2. If you do not attach the required documents, your credit will be
disallowed.
CAUTION

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3

Enter the total amount of any Archer MSA or health savings accounts distributions used to pay for
qualified health insurance coverage for the months checked on line 1 . . . . . . . . . . .

4

Subtract line 3 from line 2. If zero or less, stop; you cannot take the credit . . . . . . . .
Health Coverage Tax Credit. If you received an advance (monthly) payment in any month not
checked on line 1, see the instructions for line 5 for more details. Otherwise, multiply the amount
on line 4 by 72.5% (.725). Enter the result here and on Form 1040, line 71 (check box c); Form
1040NR, line 67 (check box c); Form 1040-SS, line 10; or Form 1040-PR, line 10 . . . . . .

5

June
December

For Paperwork Reduction Act Notice, see your tax return instructions.

Cat. No. 34641D

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Form 8885 (2013)

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Form 8885 (2013)

General Instructions
Section references are to the Internal Revenue Code
unless otherwise noted.

What's New
The Health Coverage Tax Credit (HCTC) expires at the end
of 2013. The HCTC along with any advance (monthly)
payments of the credit will no longer be available after 2013.

Future Developments
For the latest information about developments related to
Form 8885 and its instructions, such as legislation after
they were published, go to www.irs.gov/form8885.

Purpose of Form
Use Form 8885 to figure the amount, if any, of your HCTC.
Self-Employed Health Insurance Deduction
Worksheet. If you are completing the Self-Employed
Health Insurance Deduction Worksheet in your tax return
instructions and, during 2013, you were an eligible trade
adjustment assistance (TAA) recipient, alternative TAA
(ATAA) recipient, reemployment TAA (RTAA) recipient, or
Pension Benefit Guaranty Corporation (PBGC) pension
recipient, you must complete Form 8885 before
completing that worksheet. When figuring the amount to
enter on line 1 of the worksheet do not include:
• Any amounts you included on Form 8885, line 4,
• Any qualified health insurance premiums you paid to
“U.S. Treasury-HCTC,” or
• Any health coverage tax credit advance payments
shown in box 1 of Form 1099-H.

Who Can Take This Credit
You can take this credit only if (a) you were an eligible
trade adjustment assistance (TAA) recipient, alternative
TAA (ATAA) recipient, reemployment TAA (RTAA)
recipient, or Pension Benefit Guaranty Corporation
(PBGC) pension payee in 2013; or you were the family
member of a TAA, ATAA, or RTAA recipient or PBGC
payee who passed away or with whom you finalized a
divorce, (b) you cannot be claimed as a dependent on
someone else’s 2013 tax return, and (c) you met all of the
other conditions listed on line 1. If you cannot be claimed
as a dependent on someone else’s 2013 tax return,
complete Form 8885, Part I, to see if you are eligible to
take this credit.

Definitions and Special Rules
TAA Recipient
You were an eligible TAA recipient on the first day of the
month if, for any day in that month or the prior month, you:
• Received a trade readjustment allowance, or
• Would have been entitled to receive such an allowance
except that you had not exhausted all rights to any
unemployment insurance (except additional
compensation that is funded by a state and is not
reimbursed from any federal funds) to which you were
entitled (or would be entitled if you applied).
Example. You received a trade readjustment allowance
for January 2013. You were an eligible TAA recipient on
the first day of January and February.

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ATAA Recipient
You were an eligible ATAA recipient on the first day of the
month if, for that month or the prior month, you received
benefits under an alternative trade adjustment assistance
program for older workers established by the Department
of Labor.
Example. You received benefits under an alternative
trade adjustment assistance program for older workers
for October 2013. The program was established by the
Department of Labor. You were an eligible ATAA recipient
on the first day of October and November.
RTAA Recipient
You were an eligible RTAA recipient on the first day of the
month if, for that month or the prior month, you received
benefits under a reemployment trade adjustment
assistance program for older workers established by the
Department of Labor.
Example. You received benefits under a reemployment
trade adjustment assistance program for older workers
for January 2013. The program was established by the
Department of Labor. You were an eligible RTAA recipient
on the first day of January and February.
PBGC Pension Payee
You were an eligible PBGC pension payee on the first day
of the month if both of the following apply.
1. You were age 55 or older on the first day of the
month.
2. You received a benefit for that month that was paid
by the PBGC under title IV of the Employee Retirement
Income Security Act of 1974 (ERISA).
If you received a lump-sum payment from the PBGC
after August 5, 2002, you meet item (2) above for any
month that you would have received a PBGC benefit if
you had not received the lump-sum payment.
Family Members in Certain Life Events
Qualifying family members (spouses and dependents) are
considered recipients and are eligible to receive the
HCTC in the event that the TAA, ATAA, or RTAA recipient
or PBGC payee dies or with whom they finalized a
divorce. Qualified family members can receive the tax
credit for up to 24 months from the month of the event, or
until January 1, 2014, whichever comes first.
Example. Your spouse was a PBGC payee and died on
August 20, 2013. You are eligible to receive the HCTC for
August 2013 through December 2013.
Qualified Health Insurance Plan
A qualified health insurance plan is any of the following.
1. Coverage under a group health plan available
through the employment of your spouse, but see the
instructions for line 1.
2. Coverage under a non-group (individual) health
insurance plan, if the first day of your coverage started at
least 30 days before you left your job that qualified you
for TAA, ATAA, RTAA, or PBGC pension benefits, or the
date of Medicare enrollment, death of or divorce from the
original TAA recipient or PBGC payee that provided you
with extended eligibility as a qualified family member.

Form 8885 (2013)

Individual health insurance does not include any
insurance connected with a group health plan or federalor state-based health insurance coverage.
3. Coverage under a COBRA continuation provision (as
defined in section 9832(d)(1)).
Note. As of February 2009, electing to receive the 65%
COBRA premium reduction will disqualify you from
receiving the HCTC in the same month. You must pay
more than 50% of your COBRA coverage to be eligible
for the HCTC.
4. Coverage under a state-qualified health plan.
State-qualified health plans include:
a. Continuation coverage provided by the state under a
state law that requires such coverage.
b. A qualified state high risk pool (as defined in section
2744(c)(2) of the Public Health Service Act).
c. A health insurance program offered for state employees.
d. A state-based health insurance program that is
comparable to the health insurance program offered for
state employees.
e. An arrangement entered into by a state and (a) a
group health plan (including such a plan which is a
multiemployer plan as defined in section 3(37) of ERISA),
(b) an issuer of health insurance coverage, (c) an
administrator, or (d) an employer.
f. A state arrangement with a private sector health care
coverage purchasing pool.
g. A state-operated health plan that does not receive
any federal financial participation.
5. A health plan purchased through a Voluntary
Employees' Beneficiary Association (VEBA) that was
established through the bankruptcy of your former
employer. For more information, see the TIP at the end of
this section.
Exception. A qualified health insurance plan does not
include any of the following.
• Any state-based coverage listed in 4a through 4g above
unless it also meets the requirements of section 35(e)(2).
• A flexible spending or similar arrangement.
• Any insurance if substantially all of its coverage is of
excepted benefits described in section 9832(c). For
example, if you purchase dental or vision benefits
separately, these benefits are not part of a qualified
health insurance plan for the HCTC. But, if you purchase
dental or vision benefits as part of a comprehensive
package and these benefits do not represent substantially
all of its coverage, these benefits may be part of a
qualified health insurance plan and the premiums paid
may be eligible for the HCTC.
To determine whether you have a qualified health
insurance
plan, go to www.irs.gov/hctc. If your
TIP
health insurance plan is qualified and you need
further assistance, please call the HCTC
Customer Contact Center by February 28, 2014, toll-free at
1-866-628-HCTC (4282). For those with a hearing
impairment, call 1-866-626-4282 (TTY). The Customer
Contact Center is open from 8:00 am - 5:00 pm Central Time,
Monday through Friday. After February 28, 2014, please visit
www.irs.gov/hctc for updated information about the HCTC.

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Qualifying Family Member
A qualifying family member is:
• Your spouse (but see Married Persons Filing Separate
Returns below), or
• Anyone whom you can claim as a dependent (but see
the exception for Children of Divorced or Separated
Parents below).
For any month that you are eligible to claim the HCTC,
you can include premiums paid for a qualifying family
member for that month if all of the following statements
were true as of the first day of that month.
• The qualifying family member was covered by a
qualified health insurance plan (defined earlier) for which
you paid the premiums. You and your qualifying family
member do not have to be covered by the same plan.
• The qualifying family member was not enrolled in
Medicare Part A, B, or C.
• The qualifying family member was not enrolled in
Medicaid or the Children’s Health Insurance Program
(CHIP).
• The qualifying family member was not enrolled in the
Federal Employees Health Benefits Program (FEHBP) or
eligible to receive benefits under the U.S. military health
system (TRICARE).
• The qualifying family member was not covered by, or
eligible for coverage under, any employer-sponsored
health insurance plan (see the instructions for line 1).
If you are a TAA, ATAA, or RTAA recipient or PBGC
payee who enrolled in Medicare, you can receive the
HCTC for the health plan premiums of your qualified
family member(s) for up to 24 months from the month you
enrolled in Medicare, or until January 1, 2014, whichever
comes first. In order to receive the HCTC, your qualified
family members must meet all of the requirements
described above.
Married Persons Filing Separate Returns
Your spouse is not treated as a qualifying family member
if your filing status is married filing separately and either
(1) or (2) below applies.
1. Your spouse also was an eligible TAA recipient,
ATAA recipient, RTAA recipient, or PBGC pension payee
in 2013.
2. All of the following apply:
a. You lived apart from your spouse during the last 6
months of 2013.
b. A qualifying family member (other than your spouse)
lived in your home for more than half of 2013.
c. You provided over half of the cost of keeping up
your home.
Children of Divorced or Separated Parents
Even if you cannot claim your child as a dependent, he or
she is treated as your qualifying family member for the
HCTC if both of the following apply.
• You were the child’s custodial parent. This is the parent
with whom the child lived for the greater number of nights
in 2013. If the child was with each parent for an equal
number of nights, the custodial parent is the parent with
the higher adjusted gross income.

Page 5

Form 8885 (2013)

• The child’s other parent can claim the child as a
dependent under the rules for children of divorced or
separated parents (see the instructions for Form 1040,
line 6c, or Pub. 501, Exemptions, Standard Deduction,
and Filing Information, for details).
If both of the above apply, the child’s other parent
cannot treat the child as a qualifying family member for
the HCTC.
The child must also meet all of the other
conditions of a qualifying family member
defined earlier.
CAUTION

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Specific Instructions
Line 1
Employer-sponsored health insurance plan. You
cannot claim the HCTC for any month that, on the first
day of the month, either (1) or (2) next apply.
1. You were covered under any employer-sponsored
health insurance plan (including any employer-sponsored
health insurance plan of your spouse) (except insurance
substantially all of the coverage of which is of excepted
benefits described in section 9832(c)) and the employer
paid 50% or more of the cost of the coverage.
2. You were an ATAA or RTAA recipient and either of
the following applies.
a. You were eligible for coverage under any qualified
health insurance plan (including any employer-sponsored
health insurance plan of your spouse) (other than the
plans listed under 3, 4a, or 4e in the definition of
Qualified Health Insurance Plan) where the employer
would have paid 50% or more of the cost of the
coverage.
b. You were covered under any qualified health
insurance plan (including any employer-sponsored health
insurance plan of your spouse) (other than the plans listed
under 3, 4a, or 4e in the definition of Qualified Health
Insurance Plan) and the employer paid any part of the
cost of the coverage.
Any amounts contributed to the cost of
coverage by you or your spouse on a pre-tax
basis are considered to have been paid by the
CAUTION
employer.
Check the boxes on line 1 for each month that, on the
first day of the month, neither (1) nor (2) above applies
and you met all of the other conditions listed on line 1.
Example 1. On October 1, 2013, your only health
insurance coverage was under an employer-sponsored
health insurance plan. The plan is not one in which
substantially all of the coverage is of excepted benefits
described in section 9832(c). The employer paid 40% of
the cost of the coverage. You paid 20% of the cost of the
coverage through pre-tax contributions. You cannot claim
the HCTC for the month of October because the
employer is considered to have paid 60% of the cost of
the coverage.
Example 2. Assume the same facts as in Example 1
except that the employer paid only 25% of the cost of the
coverage. The employer is considered to have paid 45%
of the cost of the coverage (25% that was paid by the
employer plus 20% that you paid through pre-tax

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contributions). If you were an eligible TAA recipient or
PBGC pension payee, you can claim the HCTC for the
month of October if you met all the other conditions listed
on line 1 on October 1, 2013. If you were an ATAA or
RTAA recipient, you can claim the HCTC for the month of
October only if, on October 1, 2013, all of the following
apply.
• You were not eligible for coverage under any qualified
health insurance plan (including any employer-sponsored
health insurance plan of your spouse) (other than the
plans listed under 3, 4a, or 4e in the definition of Qualified
Health Insurance Plan) where the employer would have
paid 50% or more of the cost of the coverage.
• The plan was a type of plan listed under 3, 4a, or 4e in
the definition of Qualified Health Insurance Plan.
• You met all of the other conditions listed on line 1.

Line 2
If your qualified health insurance plan covers
anyone other than you and your qualifying
family members, see Pub. 502, Medical and
CAUTION
Dental Expenses (Including the Health Coverage
Tax Credit), before completing line 2.
Enter the total amount of insurance premiums paid for
coverage for you and all qualifying family members under
a qualified health insurance plan (defined earlier) for all
months checked on line 1. But do not include any
qualified health insurance premiums you paid to “U.S.
Treasury–HCTC” or any insurance premiums on coverage
that was actually paid for with a National Emergency
Grant. Also, do not include any advance (monthly)
payments or reimbursement credits you received, as
shown on Form 1099-H, box 1.
Example 1. You checked January on line 1. You paid
$225 ($200 for basic coverage and $25 for dental benefits
which are purchased separately) to your insurance
company for coverage in January. The $25 you paid for
dental benefits is ineligible for the HCTC. You would include
the $200 you paid for your basic insurance on line 2.
Example 2. Your insurance coverage for January cost
$225 ($200 for basic coverage and $25 for dental benefits
ineligible for the HCTC). You paid $80 to “U.S. Treasury–
HCTC” for January. The $80 equals $55 (your 27.5%
share of the $200 eligible premium) plus the $25 for
dental benefits ineligible for the HCTC. You received a
Form 1099-H showing an advance payment of $145
(72.5% of the $200 eligible premium) for January. You
would check January on line 1 but you would include
nothing for January on line 2.

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Line 5
If you receive an advance payment in any month not
checked on line 1, you must reduce the amount on line 5
by the total of that advanced payment(s). If the result is
less than zero, show the amount on line 5 as a negative
number by enclosing it in parentheses. This amount is
treated as an additional tax and must be treated as a
positive amount and included in the total you enter on
Form 1040, line 60; Form 1040NR, line 59; Form 1040-SS,
line 6; or Form 1040-PR, line 6. On the dotted line next to
that line enter “HCTC” and the amount of this additional
tax.

Form 8885 (2013)

Required Documents
You must provide verifiable proof that your health
insurance plan is qualified and that you paid the qualified
health insurance premiums by attaching the documents
listed below to your Form 8885.
All health plans. For all health plans you must include
both of the following documents.
1. A copy of your health insurance bills or COBRA
payment coupons.* 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 qualified health plan does not 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 (1a) through (1e) earlier. If your
monthly premium includes amounts that do not count
towards the HCTC, such as dental or vision coverage or
coverage for family members who are not eligible for the
HCTC, your documentation must also specify those
ineligible amounts.
2. Proof of payment 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 do not have one of these
types of proof of payment, contact your health plan for a
record of your payment(s).
COBRA coverage. You must include the information
under All health plans and one of the following
documents.
1. A copy of your completed and signed COBRA
Election Letter. It may also be called a COBRA Enrollment
Form, Application Form, Enrollment Application for
Continuing Coverage, or Election Agreement.
2. A letter from your former employer or COBRA
administrator saying you have COBRA coverage. The
letter must have:
a. The COBRA coverage start and end dates,
b. Name of the health plan,
c. Your home address, and
d. Covered family members, their dates of birth, their
relationship to you, and their social security numbers.
3. A copy of “Notice of Rights to Continue Coverage.”

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Non-group (individual) health plans. You must
include the information under All health plans and both of
the following documents.
• A letter or other document from your former employer
or your unemployment office that shows the date you left
your job.
• A document from your health plan that shows your first
date of coverage. Your first day of coverage in a nongroup (individual) health plan must have been at least 30
days before you left your job.
Coverage through your spouse’s employer. You
must include the information under All health plans and
the following documents.
• Copies of paycheck stubs showing the health coverage
deductions for the qualified months.
• A letter or other statement from your spouse’s employer
that states the employer contributed less than 50% of the
cost of the coverage.
E-filed return. If you e-file, you can attach a copy of
any required documents to an electronically filed return as
a PDF, if your tax software supports it, or you must attach
those documents to Form 8453, U.S. Individual Income
Tax Transmittal for an IRS e-file Return, and mail them to
the Internal Revenue Service according to the instructions
for that form.
Example 1. You are eligible to claim the HCTC for
October and November. In October, you paid $500 of
qualified health insurance premiums for yourself and $250
for your qualifying family members. In November, you
paid $206.25 (27.5% of the $750 November premium) to
“U.S. Treasury–HCTC” and received an advance payment
of $543.75 (72.5% of the $750 November premium). Form
1099-H shows the total advance of $543.75 in box 13.
You would include $750 on line 2 for the October
insurance payment. You would not include any part of the
November insurance premium since you already received
the advance (monthly) payment for this month. You must
attach copies of your health insurance bills and proofs of
payment for October for you and your qualifying family
members totaling $750, along with any other required
documents.
Example 2. You are eligible to claim the HCTC for
March and April. You paid $500 of qualified health
insurance premiums in each month for yourself and $250
for your qualifying family members directly to your
qualified health plan. The amount on Form 8885, line 2, is
$1,500 ($750 each for March and April). You did not
receive any HCTC advance (monthly) payments during
2013. You would enter $1,087.50 (72.5% of your March
and April premiums) on line 5. You must attach copies of
your health insurance bills and proofs of payment for
March and April for you and your qualifying family
members totaling $1,500 ($750 for each month), along
with any other required documents.