The Health Coverage Tax Credit (HCTC) is a tax credit that pays 72.5% of qualified health insurance premiums for eligible individuals and their families. The HCTC acts as partial reimbursement for premiums paid for qualified health insurance coverage and can now be claimed for qualified coverage through 2021.

Per the IRS Health Coverage Tax Credit webpage:

The Taxpayer Certainty and Disaster Tax Relief Act of 2020, Section 134 extended the HCTC program through December 31, 2021. For Participants enrolled in the Monthly HCTC Program, the final payment due date is December 10, 2021 for December coverage. The final 2021 payment file will be sent on 12/21/2021.

The IRS does not have the administrative authority to further extend the credit. If an extension is enacted by Congress, then the IRS will implement the change and notify affected taxpayers. Individuals can also monitor this site for updates.

Do not submit any payments for coverage months in 2022. If new legislation is passed, you will need to re-enroll in the program for 2022 to request advance payments and request allowable reimbursement of payments you paid directly to your vendor or provider for 2022 qualified health coverage.

You must complete and mail Form 13441-A Health Coverage Tax Credit (HCTC) Monthly Registration and Update, with all required supporting documents to the IRS to enroll. You must follow special instructions to claim the HCTC for 2021 when you file your federal income tax return in 2022. You will file Form 8885 Health Coverage Tax Credit, and attach documentation that shows that you were an eligible individual for the HCTC and that the premiums claimed for your 2021 coverage were paid. If you electronically file your Federal income tax return, you must submit the required documents with a Form 8453 U.S. Individual Income Tax Transmittal for an IRS e-file Return.

To access Form 8453 in the TaxAct program:

1. From within your TaxAct return (Online or Desktop), click Federal (on smaller devices, click in the top left corner of your screen, then click Federal).
2. Click the Other Credits dropdown, click the Other credits dropdown that appeared, then click Health coverage tax credit - [Name].
3. Continue with the interview process to enter your information.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.