Form 1099-H: Health Coverage Tax Credit (HCTC) Advance Payments – A Complete Guide for 2023
Understanding your tax forms doesn't have to be complicated. Form 1099-H relates to a federal program that helped certain Americans afford health insurance by paying a portion of their premiums directly to insurance providers. While this program officially ended on December 31, 2021, you may still encounter this form for historical tax purposes or prior-year amendments. Here's everything you need to know in plain English.
What the Form Is For
Form 1099-H is an information return that reports advance payments made through the Health Coverage Tax Credit (HCTC) program. Think of it as a receipt showing that the federal government paid 72.5% of qualified health insurance premiums directly to your insurance company on your behalf during a specific year.
The HCTC program was designed to help two specific groups of Americans maintain health insurance coverage: workers who lost their jobs due to foreign trade (certified under Trade Adjustment Assistance programs) and retirees whose pension plans were taken over by the Pension Benefit Guaranty Corporation (PBGC). If you were at least 55 years old and receiving PBGC pension payments, or if you qualified for TAA, ATAA (Alternative TAA), or RTAA (Reemployment TAA) benefits, you may have been eligible for this assistance.
The form itself shows the total amount paid on your behalf throughout the year (Box 1), the number of months you received payments (Box 2), and a month-by-month breakdown of those payments (Boxes 3–14). You don't file this form with your tax return—it's for your records. The IRS HCTC Program typically prepared and sent these forms to eligible recipients automatically.
Important note: The HCTC program expired on December 31, 2021. No new advance payments have been made since then, and the program has been officially discontinued. According to IRS guidance, Form 8885 and its instructions were discontinued beginning with tax year 2022.
When You’d Use This Form (Late/Amended Filing)
For tax year 2023, Form 1099-H would only be relevant in very limited circumstances, primarily when dealing with prior-year tax matters. Since the HCTC program ended in 2021, you would not receive a new Form 1099-H for 2023 coverage.
However, you might encounter this form if you're filing an amended return for tax year 2021 or earlier years when the program was active. If you originally filed for the yearly HCTC credit using Form 8885 and later discovered errors in the amounts reported, you'd need your Form 1099-H to reconcile the advance payments you received versus the premiums you actually paid.
The form becomes critical when you need to ensure you didn't receive more credit than you were entitled to receive. If you received monthly advance payments through the HCTC program and also claimed the yearly credit on your tax return for the same months, you'd need to file an amended return to correct this double-benefit situation. Your Form 1099-H provides the documentation showing exactly which months you received advance payments, preventing you from claiming the credit twice.
For most taxpayers in 2023, this form is now primarily a historical document. You should keep it with your tax records, particularly if you claimed HCTC benefits in 2021 or earlier years, as the IRS generally has three years to audit your return (or longer in certain circumstances).
Key Rules for 2023
The most critical rule for 2023 is that the HCTC program no longer exists. According to official IRS guidance, the HCTC expired on December 31, 2021, and cannot be claimed for coverage months beginning in 2022 or later years. This means Form 1099-H should not be issued for any 2023 coverage periods.
Historical Rules (for Reference)
- Eligibility was determined monthly. You had to qualify each month separately, meaning you needed to be a PBGC payee or TAA/ATAA/RTAA recipient for that specific month, be enrolled in qualified health insurance, and pay your share of the premiums.
- The credit covered 72.5% of premiums for qualified health insurance plans. Qualified plans included COBRA coverage (where you paid more than 50% of costs), state-qualified health plans, spousal employer coverage under certain conditions, individual health plans that existed before your job loss, and VEBA plans established due to employer bankruptcy.
- You couldn't receive the HCTC if you had disqualifying coverage. This included Medicare, Medicaid, CHIP, FEHBP, TRICARE, imprisonment, or being claimed as a dependent on someone else’s return.
- The IRS HCTC Program handled filings. In most cases, insurance providers didn’t file Form 1099-H directly—the IRS HCTC Program filed the returns and furnished statements to recipients.
Step-by-Step Overview (High Level)
While you cannot participate in the HCTC program for 2023, understanding the historical process helps explain why this form exists in your tax records.
Step 1: Enrollment and Eligibility Determination
Eligible individuals would enroll in the HCTC program after receiving certification of their PBGC or TAA eligibility. They'd provide information about their qualified health insurance plan and authorize the government to pay premiums directly to their insurer.
Step 2: Monthly Advance Payments
Each month, the IRS HCTC Program would pay 72.5% of the qualified health insurance premium directly to the insurance company. The participant paid the remaining 27.5% (or their required share).
Step 3: Form 1099-H Generation
After the tax year ended, the IRS HCTC Program would generate Form 1099-H showing all advance payments made throughout the year. This form was sent to the taxpayer, typically by January 31 of the following year.
Step 4: Tax Return Reconciliation
When filing their federal income tax return, recipients would use the information from Form 1099-H to ensure they didn't double-count benefits. If they received advance monthly payments for certain months, they couldn't also claim the yearly credit on Form 8885 for those same months.
Step 5: Record Retention
Taxpayers would keep Form 1099-H with their permanent tax records—they didn't file it with their return but needed it as documentation if the IRS ever questioned their HCTC claim.
Common Mistakes and How to Avoid Them
Mistake #1: Claiming the Credit Twice
Claiming the yearly HCTC on Form 8885 for months when advance payments were already made was the most common error.
How to avoid it: Reconcile your Form 1099-H against Form 8885 and exclude months with advance payments.
Mistake #2: Thinking Form 1099-H Must Be Filed
Some taxpayers mistakenly attached Form 1099-H to their tax return.
How to avoid it: Keep the form for your records—the IRS already has the data.
Mistake #3: Estimating Missing Numbers
Guessing payment amounts after losing Form 1099-H led to incorrect filings.
How to avoid it: Request a duplicate from the IRS rather than estimating.
Mistake #4: Assuming Any Health Insurance Qualifies
Marketplace and many employer-sponsored plans did not qualify.
How to avoid it: Verify that your plan met HCTC requirements (typically COBRA, state-qualified, or VEBA).
Mistake #5: Ignoring Eligibility Changes
Enrolling in Medicare or getting new coverage could make you ineligible mid-year.
How to avoid it: Report changes immediately to avoid overpayments.
What Happens After You Receive This Form
Since the HCTC program ended in 2021, there are no new actions required for 2023. However, understanding prior-year use remains helpful.
Immediate Next Steps (Historical)
When you received Form 1099-H, you would review it carefully to verify that Box 1 equaled the sum of Boxes 3–14, and that Box 2 matched the number of months with payments.
During Tax Filing
You would use Form 1099-H alongside Form 8885 if claiming the yearly HCTC. The form ensured you didn’t claim both the advance and yearly credits for the same months.
For Audit Protection
Form 1099-H serves as official documentation if the IRS questions your claim. Keep it with your permanent tax records.
Future Reference
Even years later, retain this form for your files. The IRS can audit up to six years in certain cases.
Program Closure Updates
The IRS officially closed HCTC operations and no longer processes HCTC-related inquiries. Contact general IRS taxpayer services for any historical questions.
FAQs
Q1: Can I still claim HCTC for 2023?
No. The program expired on December 31, 2021, and cannot be claimed for any coverage after that date. Form 8885 was discontinued starting with 2022.
Q2: I received Form 1099-H for 2021. Do I need to do anything with it now in 2023?
Keep it for your permanent tax records. You may need it if you file or amend your 2021 tax return or face an audit.
Q3: What’s the difference between Form 1099-H and Form 8885?
Form 1099-H reports government-paid premiums; Form 8885 was used to claim the yearly credit for premiums you personally paid.
Q4: My Form 1099-H shows a different amount than expected. What should I do?
Compare it with your insurance payment records and contact the IRS at 1-800-829-1040 if there are discrepancies.
Q5: I was eligible for HCTC but never enrolled. Can I still claim it?
You may file or amend returns for 2021 or earlier if within the statute of limitations (generally three years). Use Form 8885 and proof of payment.
Q6: Does Form 1099-H affect my Premium Tax Credit eligibility?
No. They are separate programs. HCTC has ended, while the Premium Tax Credit (Form 8962) continues for Marketplace insurance.
Q7: Who should I contact if I have questions about an old Form 1099-H?
The dedicated HCTC contact center is closed. Call the general IRS taxpayer assistance line at 1-800-829-1040 or work with a tax professional.
Additional Resources
For authoritative information, visit these IRS.gov pages:
You can also review IRS Publication 502 (Medical and Dental Expenses) for historical information about the HCTC program.
This summary provides general information based on IRS guidance current as of 2023. Tax laws are complex and individual circumstances vary. For specific advice about your tax situation, consult a qualified tax professional or contact the IRS directly.
