Form 8885 and the Health Coverage Tax Credit (HCTC) program officially expired on December 31, 2021, and are not available for tax year 2024.
The IRS discontinued Form 8885 beginning with the 2022 tax year.

If you’re seeking health coverage tax benefits in 2024, your primary alternative is the Premium Tax Credit (Form 8962), which supports Marketplace (HealthCare.gov) insurance plans.

1. What Form 8885 Was For

Form 8885 was used to claim the Health Coverage Tax Credit (HCTC), which subsidized 72.5% of qualified health insurance premiums for certain workers and retirees affected by trade-related job loss or failed pension plans.

Eligible Recipients

• Trade-Displaced Workers: Certified under Trade Adjustment Assistance (TAA), Alternative TAA (ATAA), or Reemployment TAA (RTAA) programs
• PBGC Pension Recipients: Individuals age 55+ receiving pension payments from the Pension Benefit Guaranty Corporation after employer pension termination

Recipients could claim the HCTC:

• Annually when filing their tax return, or
• Monthly through advance payments made directly to their insurer.

2. When You’d Use It (Late or Amended Returns)

Since the program ended in 2021, Form 8885 applies only to tax years 2021 and earlier.

You may still need it if:

• Filing a late 2021 return — You paid qualifying premiums but didn’t yet file.
• Amending prior returns (2019–2021) — You later discover eligibility for HCTC.
• Reconciling advance payments — You received some Form 1099-H advance HCTC payments and need to report them.

Amended Return Deadline: For 2021, you have until April 15, 2025, to file Form 1040-X with Form 8885. (IRS Publication 974)

3. Key Rules for the Final Year (2021)

Eligibility Requirements

You qualified if all the following applied on the first day of each month claimed:

• You were a TAA/ATAA/RTAA recipient or PBGC payee age 55+
• You paid for qualified health insurance coverage (COBRA, state continuation, VEBA, or eligible individual plans)
• You paid premiums directly to the insurer or US Treasury-HCTC
• You were not enrolled in Medicare, Medicaid, CHIP, FEHBP, or TRICARE
• Your (or your spouse’s) employer did not pay 50% or more of coverage costs
• You weren’t imprisoned or claimed as someone else’s dependent

Credit Amount: 72.5% of qualified premiums paid
Eligibility: Determined monthly based on meeting all requirements on the first day of the month.

4. Step-by-Step Filing Guide (For 2021 Returns Only)

Step 1: Gather Documentation

• Health insurance bills for each claimed month
• Proof of payment (bank statements, canceled checks, etc.)
• COBRA election letter (if applicable)
• Form 1099-H if you received advance payments

Step 2: Complete Form 8885

• Part I: Check each month you met eligibility requirements.
• Part II: Calculate the credit:
  • Line 2: Total premiums paid
  • Line 3: Subtract any HSA/MSA payments
  • Line 4: Net qualified premiums
  • Line 5: Multiply by 72.5% (0.725)

Step 3: Attach Documents

Attach Form 8885 and all supporting proof to your Form 1040, 1040-SR, 1040-NR, 1040-SS, or 1040-PR.
(Not valid with Forms 1040-EZ or 1040-A.)

Step 4: File Your Return

• Paper filing: Mail Form 8885 with documents attached.
• E-file: Use Form 8453 to submit supporting documents.

5. Common Mistakes and How to Avoid Them

• Mistake #1: Claiming months with advance payments
  Review Form 1099-H carefully. Don’t claim the yearly credit for months already paid by the advance program.
• Mistake #2: Missing documentation
  Include proof of payment for every month. Missing even one can cause disqualification.
• Mistake #3: Claiming while enrolled in other coverage
  You can’t claim HCTC if you were on Medicare, Medicaid, CHIP, FEHBP, or TRICARE—even for part of the month.
• Mistake #4: Including employer-subsidized plans
  Exclude months when your (or your spouse’s) employer paid at least 50% of premiums.
• Mistake #5: Ignoring the “first day of month” rule
  You must meet all eligibility requirements on the first day of each claimed month.
• Mistake #6: Using the wrong base form
  File with Form 1040, 1040-SR, 1040-NR, 1040-SS, or 1040-PR — not 1040-EZ or 1040-A.

6. What Happens After You File

• Processing Times
  • E-filed returns: about 3 weeks
  • Paper returns: 6–8 weeks (may take longer for document verification)
• IRS Review
  The IRS verifies eligibility, payment proofs, and insurance records. If unclear, you might receive Letter 12C asking for clarification.
• Refunds
  The HCTC is refundable—it can reduce taxes owed or produce a refund even with zero tax liability. It appears on Schedule 3 (Form 1040), line 13c.

7. Frequently Asked Questions (FAQs)

• Q1: Can I claim HCTC for 2024?
  No. The HCTC expired December 31, 2021. Use Form 8962 (Premium Tax Credit) for 2024 coverage.
• Q2: What health coverage credit is available now?
  The Premium Tax Credit (PTC) on Form 8962, based on income and family size for Marketplace coverage.
• Q3: I qualified in 2021 but didn’t claim the HCTC. Can I still file?
  Yes, until April 15, 2025. File Form 1040-X with Form 8885 and proof of premiums paid.
• Q4: What if I received both advance payments and paid premiums directly?
  Only claim the HCTC for months you paid directly. Reconcile using Form 1099-H.
• Q5: Can a spouse or dependent claim HCTC?
  Yes, for 2021 and earlier. Qualified family members of a TAA/PBGC participant could claim coverage after death, divorce, or Medicare enrollment.
• Q6: Where can I get Form 8885 (2021)?
  Visit IRS.gov/Form8885 or call 1-800-829-3676. It’s valid for 2021 and earlier only.
• Q7: Who can I contact for help?
  The HCTC Contact Center closed after 2021. Contact the IRS or a tax professional for late filings.

Looking Ahead: Health Coverage Tax Alternatives for 2024

Since Form 8885 is retired, here are current alternatives:

• Premium Tax Credit (Form 8962):
  For individuals and families purchasing Marketplace coverage with income between 100%–400% (or more) of the federal poverty line.
• Self-Employed Health Insurance Deduction (Form 7206):
  For self-employed individuals who pay for their own health coverage.
• Health Savings Account (HSA) Contributions (Form 8889):
  For individuals with high-deductible health plans to make tax-deductible contributions.

For current health coverage and assistance, visit HealthCare.gov or call 1-800-318-2596.

Sources

All information verified from official IRS and Treasury publications:

• IRS Publication 974 (2024)
• Form 8885 (2021)
• Instructions for Form 8885 (2021)
• IRS HCTC and PTC FAQs

Summary:
Form 8885 and the HCTC ended after 2021. For 2024, taxpayers should use Form 8962 (Premium Tax Credit) for Marketplace plans or explore self-employed health deductions and HSA tax benefits for health-related savings.