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Tax Tip of the Week
For the week of
October 27, 2003

Some qualify for a tax credit to pay for health insurance

Did you know that some workers and retirees can claim a tax credit to help pay for their health insurance costs? Two groups qualify for the credit, known as the Health Coverage Tax Credit (HCTC). If you are eligible, you can claim a tax credit to pay 65% of the costs of qualified health insurance coverage.

The first group consists of workers whose jobs have been adversely affected by increased imports from other countries or by a switch in production to another country. To qualify, you must be receiving benefits under one of two Trade Adjustment Assistance programs set up to assist trade-impacted workers.

The second group consists of retirees who are over age 55 and who are receiving benefits from the Pension Benefit Guaranty Corporation, or who meet certain other requirements.

If you want to claim the tax credit, your health insurance coverage must also qualify under the specific program rules. The credit is refundable - in other words, you'll be paid the credit even if you don't pay any taxes. There are two ways to apply for the credit. You can claim it in advance so that it is applied to your health insurance as you go, or you can claim it later when you file your tax return.

Not too many people qualify for this credit, but if you think you might be eligible, contact our office for further information.

Prior Tax TipsClick here to view previous tax tips.

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