1040-US: Claiming both Health Coverage Tax Credit and Premium Tax Credit

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Question

Can I claim both the Health Coverage Tax Credit (HCTC, Form 8885) and the Premium Tax Credit (PTC, Form 8962)?

Answer

For 2014 and 2015, you can claim the HCTC for a qualified health plan offered through the Marketplace. Beginning in 2016, Marketplace coverage will not be qualified coverage for the HCTC. You cannot take the HCTC and the PTC for the same coverage for the same month.

If advance payments (APTC) were made for health insurance offered through the Marketplace, Form 8962 must be filed to reconcile the advance payments. If there is excess APTC, a repayment limitation does not apply if the HCTC is claimed for any month.

If all premiums that were paid are being claimed for HCTC, enter the premiums and advance payments (if any) in Screen 1095A or Screen PTC, Shared Policy Allocation. Enter X in Screen PTC in the Claiming HCTC (Form 8885) for all premiums field. Enter the premiums paid, including any APTC, in Screen 8885 in the Qualified health insurance payments field and mark the applicable months.

If only some of the premiums paid are being claimed for HCTC, enter only the portion of the premiums that are not HCTC qualified premiums in Screen 1095A or Screen PTC, Shared Policy Allocation. Enter all advance payments. Enter the premiums claimed for HCTC in Screen 8885 in the Qualified health insurance payments field and mark the applicable months. For example, an eligible taxpayer can claim the PTC for January through September and then elect the HCTC for October through December. Enter premiums in Screen 1095A in the months January through September. If APTC was received, enter the advance payments in January through December. Enter the premiums paid (including any APTC) for October through December in Screen 8885 in the Qualified health insurance payments field. For coverage that is split as HCTC premiums for part of the year and PTC premiums for part of the year, no repayment limitation applies for excess APTC. Enter -0- in the Repayment limitation (Force) field in Screen PTC.

If there are separate health care policies and (for example) the taxpayer elects HCTC for his coverage and the spouse elects PTC for her separate coverage, then the repayment limitation would apply to the spouse’s coverage. Enter premiums, SLCSP premiums, and advance payments for the spouse in Screen 1095A. Enter only the advance payments for the taxpayer in Screen 1095A. The IRS has not provided any guidance on how this repayment limitation should be calculated if both the taxpayer and spouse received advance payments of the Premium Tax Credit. UltraTax CS will apply the limitation from the Form 8962 instructions. If you need to change the limitation, use the Repayment limitation (Force) field in Screen PTC.

See the Form 8885 instructions for further details for taxpayers who qualify for both HCTC and PTC.

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