Instructions for Form 8885 Checklist – 2019 Tax Year
Form 8885 allows eligible taxpayers to elect and calculate the Health Coverage Tax Credit for
the 2019 tax year. This IRS form serves two purposes: it enables you to claim the HCTC whether or not you received advance payments, and it reconciles any advance HCTC payments you received during the year.
Confirm Your Eligibility for the Health Coverage Tax
Credit
You qualify for the HCTC if you meet specific criteria established by the Internal Revenue
Service. Eligible individuals include displaced workers receiving Trade Adjustment Assistance,
Alternative TAA, or Reemployment TAA benefits with no age restrictions.
Individuals age 55 through 64 who are not enrolled in Medicare and who receive pension benefits from the Pension Benefit Guaranty Corporation also qualify for this tax credit. You must confirm your eligibility status before completing Part I of the form.
The 2019 instructions require you to verify that all eligibility conditions were true as of the first day of each month you claim the credit. You cannot claim the HCTC if you were enrolled in
Medicare, Medicaid, the Children's Health Insurance Program, the Federal Employees Health
Benefits Program, or TRICARE during any claimed month.
Step-by-Step Guide to Completing Form 8885 for the 2019
Tax Year
- Health insurance bills or COBRA payment coupons must show your monthly premium
- Proof of payment, such as canceled checks, bank statements, or credit card statements,
- Eligibility letters from the Department of Labor, your state workforce agency, or the
Step 1: Gather Form 1099-H and Coverage Documentation
Collect all Form 1099-H statements you received for 2019 before you begin completing Form
8885. Form 1099-H reports advance Health Coverage Tax Credit payments that the IRS made directly to your health insurance provider on your behalf.
Advanced payments appear in Box 1 of Form 1099-H, not on Form 1095-B. Form 1095-B reports only minimum essential coverage information and does not contain HCTC payment data.
Documentation requirements extend beyond Form 1099-H to include proof of your qualifying health insurance coverage for each month you claim the credit. Gather the following items: amounts, coverage dates, and health plan identification numbers to document the coverage you are claiming for the credit. must indicate both the amount you paid and the recipient of each health insurance payment.
Pension Benefit Guaranty Corporation must confirm your status as a TAA, ATAA, RTAA, or PBGC payee.
If you are claiming coverage through your spouse's employer, you must obtain a letter from that employer. The letter must state that the employer contributed less than 50 percent of the coverage cost.
Step 2: Complete Part I to Elect the Health Coverage Tax Credit
Part I of Form 8885 contains the election section where you check boxes for each eligible coverage month. Check the box for the first month in 2019 that you elect to take the HCTC, ensuring all eligibility requirements were true as of the first day of that month.
You must also check the box for each subsequent month you remained eligible for the credit.
Once you elect to take the HCTC for a month in 2019, your election applies automatically to all subsequent eligible coverage months in that year.
Make this election no later than the due date of your tax return, including any extensions you filed. File Form 8885 to elect the HCTC even if you cannot claim any credit on your income tax return because you only participated in the advance monthly payment program. Failing to make a timely election requires you to report advance monthly HCTC payment amounts as additional tax owed on your return.
- Premiums that you paid to "US Treasury-HCTC" as part of the advance payment
- Advance monthly payments shown on Form 1099-H must be excluded from the
- Premiums for which you received reimbursement by filing Form 14095 cannot be
Step 3: Calculate Your Credit Using Part II
Part II of Form 8885 contains the calculation section where you determine your actual Health
Coverage Tax Credit amount. Enter the total premiums you paid directly to your health plan on line 2 for all months you checked in Part I.
Instruction details in the official instructions specify which amounts to exclude from line 2: program must not be included when calculating eligible premiums for the credit. premiums you report when calculating the HCTC. included as eligible premiums for purposes of claiming the credit.
Subtract any Archer MSA or Health Savings Account distributions you used to pay for qualified health insurance coverage on line 3. Line 4 shows your net eligible premiums after subtracting line 3 from line 2.
Calculate your credit on line 5 by multiplying line 4 by 72.5 percent, which represents the applicable credit percentage for 2019. If you received advance HCTC payments for any months you did not check on line 1, you must complete the Excess Advance HCTC Repayment
Worksheet to determine any repayment amount.
Step 4: Address Employer-Sponsored Coverage Requirements
The 2019 instructions specify strict rules regarding employer-sponsored health insurance coverage that affect your HCTC eligibility. You cannot claim the credit for any month when you or your spouse had access to employer-sponsored coverage where the employer paid 50 percent or more of the premium cost.
This disqualification applies even if you declined the employer coverage and paid for your own qualified health insurance instead. Alternative TAA and Reemployment TAA recipients face even stricter rules and become ineligible if they had access to employer coverage where the employer would have paid 50 percent or more.
Coverage through your spouse's employer requires additional documentation when you file your tax return. Attach a letter or statement from your spouse's employer documenting that the employer contributed less than 50 percent of the coverage cost for TAA recipients and PBGC payees. Alternative TAA and Reemployment TAA recipients must provide documentation showing the employer made no contributions to the coverage cost.
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Step 5: Attach Required Documentation to Your Tax Return
Include all required documentation listed in the 2019 Form 8885 instructions with your paper return. Attach copies of all Form 1099-H statements showing advance payments received for the year.
You must also attach health insurance bills or COBRA payment coupons, proof of payment, and eligibility letters for all months claimed on line 2. The IRS will disallow your credit if you fail to attach the required documentation for any amounts you include on line 2.
Retain all other verification documents for IRS review if contacted. Keep records that demonstrate your continued eligibility throughout the year and show the allocation of premiums among covered family members.
Understand Program Extension and Year-Specific
Changes
The Health Coverage Tax Credit was originally scheduled to expire on December 31, 2019, according to the initial 2019 instructions. Enacted on December 20, 2019, the Further
Consolidated Appropriations Act extended the HCTC until the end of 2020.
A correction notice was issued by the IRS on March 31, 2020, which updated the official instructions for the 2019 Form 8885. The advance monthly payment program continued operating through December 2020 as a result of this extension.
Tax forms for the current tax year maintain a consistent two-part structure across tax years, with
Part I designated for election purposes and Part II for calculating the credit amount. Part I requires you to check boxes for eligible months, while Part II contains lines 2 through 5, where you enter premiums paid, subtract distributions, and calculate your final credit. You must always use the tax forms and instructions specific to the tax year you are filing.
Advance HCTC payments that were posted to your account in January 2020 for December
2019 coverage must be reported on your 2019 tax return, as clarified by the 2019 guidance. Do not defer these payments to your 2020 return even though you received notification after the calendar year ended.
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
