Health Coverage Tax Credit (HCTC)
The Health Coverage Tax Credit (HCTC) is a federal tax credit that helps individuals pay for health insurance premiums. It is available to certain individuals who are receiving Trade Adjustment Assistance (TAA), are eligible for Pension Benefit Guaranty Corporation (PBGC) benefits, or are retired individuals receiving pension benefits from the PBGC.
The HCTC pays a significant portion of health insurance premiums—typically 72.5%—for eligible individuals and their dependents. This means that those who qualify can significantly lower their out-of-pocket costs for health insurance. To claim the credit, individuals must file the appropriate forms with their federal tax return and may need to provide proof of eligibility and premium payments.
For example, if an eligible individual’s monthly premium for health coverage is $1,000, the HCTC would cover $725, leaving the individual to pay only $275 per month.
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