TEN_10-20.pdf

ETA Advisory File Text

TRAINING AND EMPLOYMENT NOTICE NO. 10-20DATE December 23 2020EMPLOYMENT AND TRAINING ADMINISTRATION U.S. DEPARTMENT OF LABOR WASHINGTON D.C. 20210 TO STATE WORKFORCE AGENCIES STATE WORKFORCE LIAISONS AFFILIATE AMERICAN JOB CENTER MANAGERS COMPREHENSIVE AMERICAN JOB CENTER MANAGERS STATE WORKFORCE ADMINISTRATORS STATE AND LOCAL WORKFORCE BOARD CHAIRS AND DIRECTORS STATE LABOR COMMISSIONERS STATE UI DIRECTORS RAPID RESPONSE COORDINATORS TRADE ADJUSTMENT ASSISTANCE LEADS FROM JOHN PALLASCH Assistant Secretary SUBJECT Expiration of the Health Coverage Tax Credit HCTC Program for Eligible Trade Adjustment Assistance TAA Recipients and Eligible Alternative TAA and Reemployment TAA ATAA RTAA Recipients or Eligible Pension Benefit Guaranty Corporation PBGC Recipients 1.Purpose. To provide information and expand awareness of the expiration of the HCTC Program on December 31 2020 and to advise States in assisting job seekers and workers. 2.Action Requested. States should advise eligible TAA recipients of the expiration of the HCTC Program on December 31 2020 and of the monthly payment deadline as well as how to claim the tax credit on their annual Federal income tax returns. States should continue to transmit individual HCTC eligibility records through April 2021. 3.Summary and Background. a.Summary The HCTC is not a government health insurance program it is a Federal tax credit administered by the Internal Revenue Service IRS as described on the IRS HCTC Web site www.irs.gov hctc. The credit was originally established under the Trade Reform Act of 2002 Pub. L. 107-210 and has been extended and modified several times since then. The credit is now set to expire on December 31 2020. b.Background The Trade Adjustment Assistance Reauthorization Act of 2015 TAARA 2015 reauthorized the HCTC an advanceable refundable tax credit for a percentage of the premiums paid for specified types of health insurance coverage including Consolidated Omnibus Budget Reconciliation Act COBRA continuation coverage . The HCTC is available to individuals in the TAA Program identified as eligible TAA recipients or eligible ATAA recipients under section 246 of the Trade Act as 2 amended including eligible RTAA recipients referred to collectively in this guidance as eligible TAA recipients . This benefit is also extended to certain individuals who are receiving pension payments from the PBGC. Individuals who are eligible for the HCTC may choose to have the amount of the credit paid on a monthly basis to their health coverage provider as their monthly heal th plan premium becomes due Monthly HCTC or may claim the tax credit on their annual Federal income tax returns Yearly HCTC . 4. HCTC Expiration . The HCTC Prog ram expires on December 31 2020 . The last month of health coverage for which the HCTC may be c laimed is December 2020 . The HCTC will not be available for health coverage for months starting on or after January 1 202 1. Eligible TAA recipients are responsible for paying the full amount of their health insurance premiums for coverage months beginning in 202 1. States should not transmit HCTC eligibility reco rds for months occurring in 2021 and later however any backdated records or other program updates affecting eligibility through the end of 20 20 including deletions for 20 20 continue to be requir ed for the proper administration of the Yearly HCTC throughout the 20 20 Federal tax year filing season and States will have u ntil April 15 2021 to submit those records. The 20 20 eligibility records will be required in order to verify individuals eligib ility to claim the Yearly HCTC on their 20 20 Federal income tax returns. States should advise eligible TAA recipients of the following The Trade Preferences Extension Act of 2015 Public Law 114 -27 modified and extended the HCTC Program through Decemb er 31 2019 Public Law 116 -94 the Further Consolidated Appropriations Act 2020 enacted on December 20 2019 extended the HCTC Program through December 31 2020. A fter this date the HCTC Program will have expired. Expiration of the HCTC Program mean s that all Monthly HCTC payme nts end prior to January 1 2021 . However eligible TAA Recipients who did not request the Monthly HCTC in 2020 and instead paid 100 percent of their health insurance premiums are entitled to cla im the Yearly HCTC on their 2020 Federal income tax return. They may use Form 8885 Health Coverage Tax Credit https www.irs.gov forms -pubs about - form -8885 to claim the credit and calculate the amount of any HCTC for whi ch they may be eligible. Is there an alternative to the HCTC Program Taxpayers who have been eligible for and claimed the HCTC may want to contact their current health plan administrator to obtain information to assist them in determining if their cur rent plan without the HCTC will continue to work for them and their families. Check www.HealthCare.gov for health coverage options available to taxpayers and their families. This includes enrolling in health co verage through a Health Insurance Marketplace Marketplace also known as an Exchange during the 2020 open enrollment period beginning November 1 20 20 through December 15 20 20 . Health coverage obtained during open e nrollment begins January 1 2021 . Elig ible TAA recipients 3 enrolling through a Marketplace may qualify for the IRS Premium Tax Credit 1 to help pay premiums and out -of -pocket health coverage costs. What is the due date for the final Monthly HCTC payment For participants enrolled in the Mont hly HCTC the final payme nt due date was December 10 2020 for December coverage. Do not send a payment to the HCTC Program in December 20 20 if it is for a coverage m onth that begins in January 2021 or later. For all questions about the final Monthly HCTC payment due date please refer to the IRS HCTC website at www.irs.gov hctc . How long should States continue transmitting individual HCTC eligibility records to the IRS Since the tax credit will no longer be ava ilable for mo nths beginning with January 2021 States are advise d that effective April 15 2021 the HCTC data transmissions will be discontinued and HCTC application and supporting infrastructure within the Unemployment Compensation Interstate Connection ICON network will no longer be available. Further the IRS will no longer accept electronically submitted individual HCTC eligibility records. It is important that States continue to transmit individual HCTC eligibility records for eligible TAA recipi ents 2 to the IRS via ICON network through April 15 202 1 in situations where an individual s HCTC eligibility status for one or more months before January 2021 has changed. For example if an individual was denied TRA or ATAA RTAA for a period before Janu ary 2021 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 the HCTC. Additionally if an individual s eligibility for the income support benef it award is reversed for t he period before January 1 2021 the State should transmit an individual HCTC record for the entire month s prior to January 202 1 for which the State determines that the individual should not have been determined to be an eligib le TAA recipie nt. 3 The IRS requires these 2020 individual HCTC eligibility records to verify who is eligible to claim the HCTC on 20 20 Federal income tax returns. The IRS will disregard any individual HCTC eligibility records for months in 202 1 but will retain any backdated or other eligible updates or deletions to manage the Yearly HCTC during the 20 20 tax year filing season. 1 The Premium Tax Credit subsidy information can be found here https www.irs.gov affordable -care - act individuals -and -families the -premium -tax -credit -the -basics . 2 The HCTC is available to individuals in the TAA Program identified as eligible TAA recipients or eligible ATAA recipients under section 246 of the Trade Act as amended including eligible RTAA recipients referred to collectively in this guidance as eligible TAA recipients . 3 Ibid. 4 Additional resources Employee Benefits Security Administration EBSA Benefits Advisors can provide critical need -to-know info rmation about continuation health coverage under the COBRA special enrollment rights under the Health Insurance Portability and Accountability Act HIPAA and retirement rollover provisions. They may be contacted electronically at https www.dol.gov agencies ebsa about -ebsa ask -a-question ask -ebsa or by calling toll - free at 866 444 -3272. EBSA also provides on -site assistance to dislocated workers facing job loss as a result of plant closures or layoffs by participating in State -sponsored Rapid Response sessions. Rapid Response Coordinators are encouraged to contact EBSA at the number listed above about information for and participation at Rapid Response events. 5. Inquir ies . Visit www.irs.gov hctc for updates. Please direct questions about HCTC expiration to the HCTC Customer Contact Center at 844 853 -7210. Direct questions about general tax -related information to the IRS at 800 829 -1040. For all TAA -related inquiries please contact your Regional Trade Coordinator. 6. References . Not applicable. 7. Attachment . Not applicable.