Form 1099-H: Health Coverage Tax Credit (HCTC) Advance Payments — 2013 Guide

What this form is

Form 1099-H reports advance monthly HCTC payments the government sent directly to your health plan during 2013. In 2013, the HCTC covered 72.5% of qualified health insurance premiums for eligible individuals; you paid the remaining 27.5%.

• If you enrolled in the monthly advance payment program, you’ll receive Form 1099-H.
• If you paid premiums yourself and plan to claim the credit at filing, you use Form 8885; Form 1099-H helps you avoid double-counting months already subsidized.
• Key fields:
  • Box 1: Total advance payments (sum of Boxes 3–14).
  • Box 2: Number of months advance payments were made (0–12).
  • Boxes 3–14: Month-by-month advance amounts.

2013 was the last calendar year before the HCTC lapsed on January 1, 2014. (It was later revived under separate legislation, but that does not affect 2013 filing.)

When you’ll use it (including late/amended returns)

• Agencies (or the HCTC Transaction Center) furnished 2013 Forms 1099-H in early 2014.
• Late filing a 2013 return? You’ll need the form to complete Form 8885 accurately.
• Amending 2013? Use 1099-H to reconcile months with advance payments vs. months you paid 100% out of pocket.
• Keep Form 1099-H with your records; do not attach it to the return. You do attach Form 8885.

Eligibility & key 2013 rules (high level)

Credit amount: 72.5% of qualified premiums for months you’re eligible.

Eligibility is month-by-month (you must qualify on the first day of each month). In 2013, typical eligible categories included:

• PBGC pension recipients (generally age 55+).
• TAA/ATAA/RTAA recipients.
• Certain qualified family members (e.g., after divorce/Medicare enrollment/death of the primary eligible individual).

Qualified coverage generally included:

• COBRA (you/spouse paying >50% of the premium),
• State-qualified HCTC plans,
• Certain non-group policies (purchased ≥30 days before job loss),
• VEBA plans after specific employer bankruptcies,
• Some spousal employer plans if you (or spouse) paid >50%.

Disqualifiers for a month include (non-exhaustive): enrollment in Medicare A/B/C; Medicaid, CHIP, FEHBP, or TRICARE; being claimable as a dependent; receiving the 65% COBRA premium reduction; or employer paying ≥50% of premiums.

You cannot double-dip. Months with advance payments on 1099-H cannot be claimed again on Form 8885.

How to use Form 1099-H with Form 8885 (quick steps)

1. Review your 1099-H.
   • Confirm Box 1 equals the sum of Boxes 3–14.
   • Confirm Box 2 matches the count of months with entries in Boxes 3–14.
2. Assemble documentation.
   • Insurance bills showing coverage, premium amount, dates, and policy info.
   • Proof of payment (canceled checks/ACH/CC statements).
   • COBRA election letters, VEBA/plan letters, non-group policy start dates.
   • Proof of monthly eligibility (PBGC/TAA/ATAA/RTAA/family status).
3. Form 8885 – Part I (Eligibility by month).
   • Check each month you met all requirements on the first day and had qualified coverage.
4. Form 8885 – Part II (Compute the credit).
   • Line 2: Enter only premiums you paid directly for months checked in Part I that do not appear as advance-payment months on 1099-H.
   • Reduce for MSA/HSA distributions used for premiums if applicable.
   • Multiply qualified premiums by 72.5% to get the yearly credit.
5. Reconcile improper advance payments (if any).
   • If 1099-H shows advance payments for a month you cannot check in Part I (ineligible that month), reduce your calculated credit by those improper advance amounts.
   • If the reduction exceeds your calculated credit, the excess becomes additional tax (reported in the “Other taxes” section per the 2013 Form 8885/1040 instructions).
6. File.
   • Attach Form 8885 to your 2013 Form 1040/1040-NR/1040-SS/1040-PR.
   • Do not attach 1099-H; retain it with records.

Common mistakes (and easy fixes)

1. Double-claiming months with advance payments.
   • Fix: Exclude any month shown in Boxes 3–14 of 1099-H from Form 8885 Line 2.
2. Missing documentation.
   • Fix: Include bills + proof of payment for each claimed month; follow the Form 8885 doc checklist.
3. Checking ineligible months in Part I.
   • Fix: Re-verify first-day-of-month status (Medicare/Medicaid enrollment dates, employer contribution %, PBGC/TAA status).
4. Including ineligible premiums (separate dental/vision, family members who don’t qualify).
   • Fix: Only count qualified health coverage; exclude separately purchased supplemental plans.
5. Not reconciling improper advance payments.
   • Fix: Reduce your computed credit by any advance amounts for ineligible months; if negative, report as additional tax per instructions.
6. Filing or discarding 1099-H.
   • Fix: Keep 1099-H with your records (the IRS already has the data).

What happens after you file

• Automated matching: IRS systems match Form 8885 with the 1099-H data. Clean reconciliation → normal processing.
• If something doesn’t match: Expect a notice requesting documentation or proposing changes (respond by the stated deadline).
• Repayment of excess advance payments: Handled on the tax return (reduces refund/increases amount due). No separate payment to the HCTC program is needed.
• Recordkeeping: Keep 1099-H, Form 8885, bills, and payment proof ≥3 years (longer is better for HCTC months).

FAQs

Do I attach 1099-H to my return?
No. Use it to complete Form 8885; keep 1099-H in your files.

My 1099-H doesn’t match my records.
Contact the issuer (health plan/HCTC center at the time) to correct. If you can’t get a copy, the IRS can provide an information return transcript for 2013 showing 1099-H data.

Can I claim the yearly HCTC for months with advance payments?
No—those months are already subsidized.

I received advance payments for a month I wasn’t eligible.
You must repay via your return: reduce your computed credit by those amounts; any negative becomes additional tax.

I lost my 1099-H. What now?
Try the issuer first; if unavailable, request an IRS transcript showing 2013 information returns, and reconstruct from your premium bills and receipts.

I’m claimable as someone else’s dependent—eligible?
No. Being claimable as a dependent disqualifies you for that month.

Can I still claim a refund for 2013?
The standard three-year refund window from the original due date has passed. You may still file to satisfy filing requirements, but refunds are generally no longer allowable unless a special rule applies—consult a tax professional.

What I adjusted from your draft

• Removed fragile line-number references (these differ by form version and can confuse readers).
• Emphasized “first-day-of-month” eligibility and double-dip prevention.
• Clarified that additional tax from improper advance payments is reported in the Other taxes section per the instructions (not a specific line number).
• Streamlined documentation and reconciliation steps for Form 8885.

‍