UIPL_7_14_Acc.pdf

ETA Advisory File Text

RESCISSIONS None EXPIRATION DATE Continuing ADVISORY UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 7-14 TO STATE WORKFORCE AGENCIES FROM ERIC M. SELEZNOW s Acting Assistant Secretary SUBJECT Expiration of the Health Coverage Tax Credit HCTC for Eligible Trade Adjustment Assistance TAA Recipients 1. Purpose. To further advise states of the expiration of the HCTC program and provide guidance regarding the phase out of the state data transmittals on eligible TAA recipients to the Internal Revenue Service IRS for HCTC purposes. 2. References. The Trade Adjustment Assistance Extension Act of 2011 Public Law Pub. L. No. 112 - 40 enacted October 21 2011 The Omnibus Trade Act of 2010 Pub. L. No. 111-344 enacted December 29 2010 Sections 1899A 1899B 1899C of Division B of the American Recovery and Reinvestment Act of 2009 Pub. L. No. 111-5 enacted February 17 2009 The Trade Adjustment Assistance Reform Act of 2002 Pub. L. No. 107-210 enacted Aug ust 6 2002 Section 35 of the Internal Revenue Code IRC of 1986 26 U.S.C. 35 Training and Employment Guidance Letter TEGL No. 11-02 Operating Instructions for Im plementing the Amendments to the Trade Act of 1974 Enacted by the Trade Act of 2002 and Changes 1 2 and 3 Unemployment Insurance Program Letter UIPL No. 02-03 Health Insurance Tax Credit for El igible Trade Adjustment Assistance Trade Readjustment Allowances TAA TRA Recipients UIPL No. 05-03 Health Insurance Tax Credit for Eligible Trade Adjustment Assistance Trade Readjustment Allowances TAA TRA Recipients UIPL No. 33-03 Questions and Answers About Implementation of the Advance Health Coverage Tax Credit TEGL 22 -08 Operating Instructions for Implementing the Amendments to the Trade Act of 1974 Enacted by the Trade and Globalization Adjustment Assistance Act of 2009 and Change 1 UIPL No. 21-09 Health Coverage Tax Credit HCTC for Eligible Trade Adjustment Assistance TAA Recipients EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY SYSTEM U.S. DEPARTMENT OF LABOR Washington D.C. 20210 CLASSIFICATION UI TRA HCTC CORRESPONDENCE SYMBOL OUI DUIO DATE February 5 2014 2 TEGL No. 16-10 Instructions for Phasing Out Changes to the Trade Act of 1974 Enacted by the Trade and Globalization Adjustment Assistance Act of 2009 and Changes 1 and 2 TEGL No. 10-11 Operating Instructions for Implementing the Amendments to the Trade Act of 1974 Enacted by the Trade Adjustment Assistance Extension Act of 2011 TAAEA and Changes 1 and 2 and Training and Employment Notice TEN No. 15-13 Expiration of the Health Coverage Tax Credit HCTC Program for Eligible Trade Adjustment Assistance TAA Recipients and Eligible Alternative TAA ATAA RTAA Recipients or Eligible Pension Benefit Guaranty Corporation PBGC Recipients. 3. Background. The Trade Adjustment Assistance Reform Act of 2002 Trade Act created a Federal income tax credit the HCTC administered by the IRS. The HCTC subsidizes private health insurance coverage for individuals in the TAA program identified as eligible TAA recipients and eligible alternative TAA ATAA recipients. See UIPL Nos. 02-03 05-03 and 33 -03. An eligible TAA recipient is defined as an individual who receives Trade Readjustment Allowances TRA for any day of the month and the next month following the last month the individual meets the definition or who would be eligible to receive TRA but for the fact that s he has not exhausted his or her unemployment compensation UC entitlement. An eligible alternative TAA ATAA recipient is defined as an individual who is a worker under section 246 a 3 B of the Trade Act and who is participating in the program established under paragraph a 1 of that section for a month and is receiving a benefit for that month. The American Recovery and Reinvestment Act of 2009 Recovery Act changed the name of ATAA to reemployment training adjustment assistance RTAA and changed the substantive requirements for the benefit available under section 246 a 3 B of the Trade Act. As explained in Section J of TEGL No. 22 -08 the category of individuals known as the eligible alternative TAA recipients includes both ATAA RTAA recipients. The Recovery Act also provided a Special Rule to amend the definition of an eligible TAA recipient for purposes of the HCTC. The Special Rule allowed coverage for an individual who Is in a break in approved training that exceeds 30 days and the break falls within the eligibility period for receipt of TRA provided under the Trade Act or Is receiving unemployment compensation UC which includes regular UC Extended Benefits EB and Emergency Unemployment Compensation EUC for any day of such month and who would be eligible to receive TRA except that s he has not exhausted UC for such month without regard to the enrollment in training requirements. 3 Subtitle B of the Trade Adjustment Assistance Extension Act of 2011 extended the HCTC program as provided by the Recovery Act amendments to January 1 2014. States transmit records of eligible TAA recipients and eligible ATAA RTAA recipients to the IRS via the UC Interstate Connection ICON network. The IRS uses the states information to determine whether the eligible TAA or ATAA RTAA recipients are eligible for HCTC. 4. Expiration of HCTC. The HCTC program expired on January 1 2014 and the tax credit is no longer available. The last HCTC payment was made in December 2013. Beginning January 1 2014 individuals who were determined to be eligible TAA recipients or ATAA RTAA recipients are responsible for paying their full health coverage premiums. States should plan to discontinue transmitting HCTC eligibility records for months occurring in 2014 and later however any backdated records or other program updates including deletions for 2013 continue to be required for the proper administration of the annual HCTC during the 2013 tax year filing season. The 2013 eligibility records will be used to verify individuals eligibility to claim the HCTC on their Federal income tax returns. Information about the expiration of the HCTC program has been included in the HCTC Newsletter and the IRS conducted a Webinar for states on December 18 2013. For more information please visit the IRS Web site at http www.irs.gov Individuals The-Health- Coverage-Tax-Credit- HCTC -Program. The Employment and Training Administration also issued TEN No. 15-13 on December 12 2013 to provide information on this subject. 5. HCTC Guidance for States. States must continue to transmit individual HCTC eligibility records for eligible TAA recipients and ATAA RTAA recipients to the IRS via the ICON network through April 15 2014 in situations where an individual s HCTC eligibility status for one or more months before January 2014 has changed. For example if an individual was denied UC TRA benefits or ATAA RTAA for a period before January 2014 and such denial is reversed the state should transmit an individual HCTC record for the period for which the state determines that the individual was eligible for HCTC. Additionally if an individual s eligibility for the income support benefit award is reversed for the period before January 1 2014 the state should transmit an individual HCTC record for the entire month s before January 2014 for which the state determines that the individual should not have been determined to be an eligible TAA recipient or eligible ATAA RTAA recipient. States are advised that effective April 15 2014 the HCTC application and supporting infrastructure within the ICON network will no longer be available. The IRS will no longer accept electronically submitted individual HCTC eligibility records. HCTC data transmissions will no longer be needed after April 15 2014 since the tax credit will no longer be available for months beginning with January 2014. A manual submission process must be followed to submit any outstanding 2013 eligibility records after April 15 2014 to correct individuals HCTC eligibility status for months before January 2014 as described above. 4 States may continue to direct individuals to the HCTC Customer Contact Center CCC and encourage them to reach out if needed before February 28 2014. States should advise individuals that the CCC will be permanently closed after February 27 2014. The CCC contact numbers until that date are 1-866-628 -HCTC 1-866 -628 -4282 and 1 -866-626 -4282 TDD TTY . 6. Action Requested. State Administrators are to provide this information to appropriate staff. 7. Inquiries. Please direct all inquiries to the appropriate Regional Office.