What IRS Form 1099-H Is For
Form 1099-H is an Information Return that reports HCTC advance payments made to a Health Insurance Provider on behalf of eligible individuals for the 2019 Tax Year. These advance payments cover part of the Health Insurance Premiums through the Health Coverage Tax Credit. Eligible recipients use the form to report advanced payments correctly on their federal income tax return.
When You’d Use IRS Form 1099-H
You use Form 1099-H when you receive HCTC advance payments and must report them during the Tax Filing Process. You also use it when filing late or submitting an amended Income Tax Return for corrected amounts. Late filing applies when information changes or when taxpayers need to update entries in response to revised reporting requirements.
Key Rules or Details for 2019
- Eligibility criteria: Eligible individuals include those receiving Trade Adjustment Assistance, Alternative TAA, Reemployment TAA, or Pension Benefit Guaranty Corporation benefits. These individuals qualify only if they are not enrolled in Medicare during the eligible months.
- Coverage percentage: The HCTC Program covers 72.5% of qualified Health Insurance Premiums, and taxpayers pay the remaining portion. This calculation applies to all qualifying family members included in the health plan.
- Insurance restrictions: Marketplace Health Insurance is not eligible for the credit, and certain individuals are not allowed to claim coverage supported by employer contributions. This limitation also applies when employers contribute through pre-tax payroll deductions.
- Documentation Requirements: The IRS requires taxpayers to retain documents needed for at least three years to verify premiums paid and advance payments received. This helps ensure accuracy during IRS reviews of Information Returns.
- Reporting expectations: You must use the Appropriate Boxes on Form 1099-H to report advanced payments and verify the total amount. These entries help determine the proper Total Credit or repayment on a Federal Income Tax Return.
Browse more tax form instructions and filing guides in our Forms Hub.
Step-by-Step (High Level)
Step 1: Receive your Form 1099-H
You receive Form 1099-H from a Health Insurance Company or the IRS HCTC Program, and it shows Advance Payments Received during the Tax Year. The form lists the Total Amount paid on your behalf along with your Social Security Number or Taxpayer Identification Number.
Step 2: Review the Form 1099-H entries
You review the form carefully to ensure accuracy, including the monthly amounts and total HCTC Payments. This step confirms that the Health Insurance Provider reports the correct information and that all required entries appear as instructed by the IRS.
Step 3: Gather all supporting records
You collect bills, receipts, and payment confirmations that show the Health Insurance Premiums you paid personally. You also gather eligibility letters from the Department of Labor or the Pension Benefit Guaranty Corporation, which support your claim when filing your Federal Income Tax Return.
Step 4: Complete Form 8885 for the HCTC claim
You complete Form 8885 to calculate the Total Credit and report any Qualifying Family Members. You enter the premiums you pay directly and compare them to HCTC Advance Payments to determine additional credit or repayment for the Tax Year.
Step 5: Attach supporting documentation
You include copies of Required Documents, such as bills, proof of payment, and eligibility letters, when claiming more credit than the Advanced Payments covered. This documentation supports your filing and reduces delays caused by missing information.
Step 6: File your federal return
You file Form 8885 and Form 1099-H with your Federal Income Tax Return using the proper IRS Tax Forms. You follow Specific Instructions to include repayment amounts or remaining credit and ensure each entry appears on the correct line.
Step 7: Report results on the correct lines
You report your final credit or repayment on the appropriate lines of your Income Tax Return. These entries complete your filing responsibilities and provide the IRS with accurate information for processing and verifying your claim.
Learn more about federal tax filing through our IRS Form Help Center.
Common Mistakes and How to Avoid Them
- Misreporting advance payments: Some taxpayers incorrectly record Advance Payments as personal premiums, which improperly increases the credit calculation. You can avoid this error by entering only premiums you personally pay and confirming amounts reported by the Health Insurance Provider.
- Skipping Form 8885: Certain individuals mistakenly believe that receiving benefits absolves them of their responsibility. You can avoid repayment penalties by always filing Form 8885 when Form 1099-H is issued, since the IRS requires the credit election.
- Claiming ineligible months: Recipients sometimes include months when Medicare or employer coverage applies. You can prevent eligibility mistakes by checking each month carefully and confirming that no restricted coverage applies to your filing period.
- Missing required documents: Missing payment proof or eligibility letters leads to delays and IRS requests. You can avoid problems by collecting all Required Documents before submitting your Federal Income Tax Return.
- Incorrect identifying information: Incorrect Social Security Numbers or Taxpayer Identification Numbers cause mismatches. You can avoid IRS processing issues by verifying all personal identifying entries before filing.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File
The IRS reviews your Federal Income Tax Return and confirms that Form 1099-H amounts match your reported entries. If your Total Credit exceeds Advance Payments Received, you receive additional money. You are required to reimburse the IRS for any overpayments they discover. The IRS may request Required Documents, and you should keep all records for at least three years.
FAQs
Why does Form 1099-H 2019 show advance payments when I pay some premiums myself?
Form 1099-H lists only HCTC Advance Payments, so you report your personal payments separately on Form 8885 when calculating the Health Coverage Tax Credit.
How does the Health Coverage Tax Credit affect my Federal Income Tax Return?
The credit reduces your taxes owed or increases your refund when your personal premiums exceed the Advance Payments Covered under the HCTC Program.
What does Form 1099-H report when I receive HCTC Advance Payments?
The form reports the total amount your insurance provider receives from the IRS on your behalf for eligible health insurance coverage.
How do HCTC payments affect my tax filing process under the Coverage Tax Credit HCTC rules?
You reconcile all HCTC Payments on Form 8885 to determine whether you owe money or qualify for more credit for the Tax Year.
Why does my Health Insurance Company issue a 1099-H for reporting requirements?
The IRS requires Health Insurance Companies to file Information Returns that report payments made for Eligible Individuals under federal guidelines.
How do I correct my Form 1099-H if the Credit HCTC advance payments appear inaccurate?
You contact the IRS HCTC Program or your Health Insurance Company for a corrected form and file an amended return if necessary.
What should I do if my Form 1099-H Health entries include ineligible months?
You review eligibility month-by-month and use Form 8885 to report only qualified months to avoid penalties and ensure accuracy.
