The Health Coverage Tax Credit (HCTC) is a program administered by the Internal Revenue Service (IRS) that may provide up to an 80% reduction in your monthly premium.

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Effective January 1, 2008 new legislation implemented important provisions to help reduce the number of Missourians without health insurance through portability and fairer tax treatment among all consumers of health care. The legislation designated the MHIP as a qualified coverage option under the Trade Adjustment Assistance Act (TAA). This designation provides a tax deduction for all Missourian for health insurance premiums included in their federally adjusted gross income.

The Trade Adjustment Assistance Reform Act of 2002 (TAA) created a federal tax credit which subsidizes private health insurance coverage for:

• displaced workers certified to receive certain TAA benefits
• older workers receiving ATAA benefits
• individuals receiving benefits from PBGC

The tax credit is 80% of the premium amount paid by eligible individuals for qualified health insurance coverage. This credit is referred to as the Health Coverage Tax Credit (HCTC) and is administered by the Internal Revenue Service (IRS).  Two options are available to an eligible individual to receive the benefit.  Taxpayers may:

• elect to claim the 80% credit on their federal tax return at the end of the year, OR
• obtain an advance credit of 80% which requires the taxpayer to pay the 20% balance of the monthly premium.

For additional information on the HCTC at www.irs.gov, click here.

For additional information on the HCTC for PBGC recipients, click here.