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What is the Health Coverage Tax Credit?

In 2002, Congress passed a law granting a federal income tax credit for health insurance to a small group of dislocated workers and early retirees. This Health Coverage Tax Credit (HCTC) is equal to 65 percent of the premium paid for "qualified" health coverage for people eligible for the credit and their dependents. The credit is also refundable -- you can claim it even if you do not make enough money to owe federal income taxes. And, the credit is advance-payable -- you do not have to wait until April 15th to claim it for last year's qualified health coverage expenses. Instead, you can apply to have the Internal Revenue Service (IRS) pay this credit directly to your qualified health insurance coverage on a month-by-month basis as long as you are eligible to receive it.

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Important: This content reflects information from various individuals and organizations and may offer alternative or opposing points of view. It should not be used for medical advice, diagnosis or treatment. As always, you should consult with your healthcare provider about your specific health needs.