26 U.S.C. § 35: Health insurance costs of eligible individuals

In the case of an individual, there shall be allowed as a credit against the tax imposed by subtitle A an amount equal to 72.5 percent of the amount paid by the taxpayer for coverage of the taxpayer and qualifying family members under qualified health insurance for eligible coverage months beginning in the taxable year. is an eligible individual, is covered by qualified health insurance, the premium for which is paid by the taxpayer, does not have other specified coverage, and is not imprisoned under Federal, State, or local authority, and such month begins more than 90 days after the date of the enactment of the Trade Act of 2002, and before January 1, 2022 . In the case of a joint return, the requirements of paragraph (1)(A) shall be treated as met with respect to any month if at least 1 spouse satisfies such requirements. an eligible TAA recipient, an eligible alternative TAA recipient, and an eligible PBGC pension recipient. Except as provided in subparagraph (B), the term “eligible TAA recipient” means, with respect to any month, any individual who is receiving for any day of such month a trade readjustment allowance under chapter 2 of title II of the Trade Act of 1974 or who would be eligible to receive such allowance if section 231 of such Act were applied without regard to subsection (a)(3)(B) of such section. An individual shall continue to be treated as an eligible TAA recipient during the first month that such individual would otherwise cease to be an eligible TAA recipient by reason of the preceding sentence. is receiving for any day of such month a trade readjustment allowance under chapter 2 of title II of the Trade Act of 1974, would be eligible to receive such allowance except that such individual is in a break in training provided under a training program approved under section 236 of such Act that exceeds the period specified in section 233(e) of such Act, but is within the period for receiving such allowances provided under section 233(a) of such Act, or is receiving unemployment compensation (as defined in section 85(b)) for any day of such month and who would be eligible to receive such allowance for such month if section 231 of such Act were applied without regard to subsections (a)(3)(B) and (a)(5) thereof. is a worker described in section 246(a)(3)(B) of the Trade Act of 1974 who is participating in the program established under section 246(a)(1) of such Act, and is receiving a benefit for such month under section 246(a)(2) of such Act. has attained age 55 as of the first day of such month, and is receiving a benefit for such month any portion of which is paid by the Pension Benefit Guaranty Corporation under title IV of the Employee Retirement Income Security Act of 1974. the taxpayer’s spouse, and any dependent of the taxpayer with respect to whom the taxpayer is entitled to a deduction under section 151(c). If section 152(e) applies to any child with respect to any calendar year, in the case of any taxable year beginning in such calendar year, such child shall be treated as described in paragraph (1)(B) with respect to the custodial parent (as defined in section 152(e)(4)(A)) and not with respect to the noncustodial parent. Coverage under a COBRA continuation provision (as defined in section 9832(d)(1)). State-based continuation coverage provided by the State under a State law that requires such coverage. Coverage offered through a qualified State high risk pool (as defined in section 2744(c)(2) of the Public Health Service Act). Coverage under a health insurance program offered for State employees. Coverage under a State-based health insurance program that is comparable to the health insurance program offered for State employees. a group health plan (including such a plan which is a multiemployer plan as defined in section 3(37) of the Employee Retirement Income Security Act of 1974), an issuer of health insurance coverage, an administrator, or an employer. Coverage offered through a State arrangement with a private sector health care coverage purchasing pool. Coverage under a State-operated health plan that does not receive any Federal financial participation. Coverage under a group health plan that is available through the employment of the eligible individual’s spouse. In the case of any eligible individual and such individual’s qualifying family members, coverage under individual health insurance (other than coverage enrolled in through an Exchange established under the Patient Protection and Affordable Care Act). For purposes of this subparagraph, the term “individual health insurance” means any insurance which constitutes medical care offered to individuals other than in connection with a group health plan and does not include Federal- or State-based health insurance coverage. Coverage under an employee benefit plan funded by a voluntary employees’ beneficiary association (as defined in section 501(c)(9)) established pursuant to an order of a bankruptcy court, or by agreement with an authorized representative, as provided in section 1114 of title 11 , United States Code. Each qualifying individual is guaranteed enrollment if the individual pays the premium for enrollment or provides a qualified health insurance costs credit eligibility certificate described in section 7527 and pays the remainder of such premium. No pre-existing condition limitations are imposed with respect to any qualifying individual. The total premium (as determined without regard to any subsidies) with respect to a qualifying individual may not be greater than the total premium (as so determined) for a similarly situated individual who is not a qualifying individual. Benefits under the coverage are the same as (or substantially similar to) the benefits provided to similarly situated individuals who are not qualifying individuals. an eligible individual for whom, as of the date on which the individual seeks to enroll in the coverage described in subparagraphs (B) through (H) of paragraph (1), the aggregate of the periods of creditable coverage (as defined in section 9801(c)) is 3 months or longer and who, with respect to any month, meets the requirements of clauses (iii) and (iv) of subsection (b)(1)(A); and the qualifying family members of such eligible individual. a flexible spending or similar arrangement, and any insurance if substantially all of its coverage is of excepted benefits described in section 9832(c). Such individual is covered under any insurance which constitutes medical care (except insurance substantially all of the coverage of which is of excepted benefits described in section 9832(c)) under any health plan maintained by any employer (or former employer) of the taxpayer or the taxpayer’s spouse and at least 50 percent of the cost of such coverage (determined under section 4980B) is paid or incurred by the employer. eligible for coverage under any qualified health insurance (other than insurance described in subparagraph (A), (B), or (F) of subsection (e)(1)) under which at least 50 percent of the cost of coverage (determined under section 4980B(f)(4)) is paid or incurred by an employer (or former employer) of the taxpayer or the taxpayer’s spouse, or covered under any such qualified health insurance under which any portion of the cost of coverage (as so determined) is paid or incurred by an employer (or former employer) of the taxpayer or the taxpayer’s spouse. For purposes of subparagraphs (A) and (B), the cost of coverage shall be treated as paid or incurred by an employer to the extent the coverage is in lieu of a right to receive cash or other qualified benefits under a cafeteria plan (as defined in section 125(d)). is entitled to benefits under part A of title XVIII of the Social Security Act or is enrolled under part B of such title, or is enrolled in the program under title XIX or XXI of such Act (other than under section 1928 of such Act). is enrolled in a health benefits plan under chapter 89 of title 5, United States Code, or is entitled to receive benefits under chapter 55 of title 10, United States Code. With respect to any taxable year, the amount which would (but for this subsection) be allowed as a credit to the taxpayer under subsection (a) shall be reduced (but not below zero) by the aggregate amount paid on behalf of such taxpayer under section 7527 for months beginning in such taxable year. Amounts taken into account under subsection (a) shall not be taken into account in determining any deduction allowed under section 162( l ) or 213. Amounts distributed from an Archer MSA (as defined in section 220(d)) or from a health savings account (as defined in section 223(d)) shall not be taken into account under subsection (a). No credit shall be allowed under this section to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins. the taxpayer is married at the close of the taxable year, the taxpayer and the taxpayer’s spouse are both eligible individuals during the taxable year, and the taxpayer files a separate return for the taxable year. Rules similar to the rules of paragraphs (3) and (4) of section 21(e) shall apply for purposes of this section. For purposes of this section, rules similar to the rules of section 213(d)(6) shall apply with respect to any contract for qualified health insurance under which amounts are payable for coverage of an individual other than the taxpayer and qualifying family members. Payments made by the Secretary on behalf of any individual under section 7527 (relating to advance payment of credit for health insurance costs of eligible individuals) shall be treated as having been made by the taxpayer on the first day of the month for which such payment was made. Payments made by the taxpayer for eligible coverage months shall be treated as having been made by the taxpayer on the first day of the month for which such payment was made. In the case of an assistance eligible individual who receives premium assistance for continuation coverage under section 9501(a)(1) of the American Rescue Plan Act of 2021 for any month during the taxable year, such individual shall not be treated as an eligible individual, a certified individual, or a qualifying family member for purposes of this section or section 7527 with respect to such month. In the case of any month which would be an eligible coverage month with respect to an eligible individual but for subsection (f)(2)(A), such month shall be treated as an eligible coverage month with respect to such eligible individual solely for purposes of determining the amount of the credit under this section with respect to any qualifying family members of such individual (and any advance payment of such credit under section 7527). This subparagraph shall only apply with respect to the first 24 months after such eligible individual is first entitled to the benefits described in subsection (f)(2)(A). In the case of the finalization of a divorce between an eligible individual and such individual’s spouse, such spouse shall be treated as an eligible individual for purposes of this section and section 7527 for a period of 24 months beginning with the date of such finalization, except that the only qualifying family members who may be taken into account with respect to such spouse are those individuals who were qualifying family members immediately before such finalization. any spouse of such individual (determined at the time of such death) shall be treated as an eligible individual for purposes of this section and section 7527 for a period of 24 months beginning with the date of such death, except that the only qualifying family members who may be taken into account with respect to such spouse are those individuals who were qualifying family members immediately before such death, and any individual who was a qualifying family member of the decedent immediately before such death (or, in the case of an individual to whom paragraph (4) applies, the taxpayer to whom the deduction under section 151 is allowable) shall be treated as an eligible individual for purposes of this section and section 7527 for a period of 24 months beginning with the date of such death, except that in determining the amount of such credit only such qualifying family member may be taken into account. This section shall not apply to any taxpayer for any eligible coverage month unless such taxpayer elects the application of this section for such month. an election to have this section apply for any eligible coverage month in a taxable year shall be made not later than the due date (including extensions) for the return of tax for the taxable year; and any election for this section to apply for an eligible coverage month shall apply for all subsequent eligible coverage months in the taxable year and, once made, shall be irrevocable with respect to such months. An eligible coverage month to which the election under paragraph (11) applies shall not be treated as a coverage month (as defined in section 36B(c)(2)) for purposes of section 36B with respect to the taxpayer. the sum of any advance payments made on behalf of the taxpayer under section 1412 of the Patient Protection and Affordable Care Act and section 7527 for months during such taxable year, over the sum of the credits allowed under this section (determined without regard to paragraph (1)) and section 36B (determined without regard to subsection (f)(1) thereof) for such taxable year; and section 36B(f)(2) shall not apply with respect to such taxpayer for such taxable year, except that if such taxpayer received any advance payments under section 7527 for any month in such taxable year and is later allowed a credit under section 36B for such taxable year, then the amount determined under clause (i) shall be substituted for the amount determined under section 36B(f)(2). The Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this section, section 6050T, and section 7527. Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 6501 and 7527 of this title] shall apply to coverage months in taxable years beginning after December 31, 2013 . The amendment made by subsection (d)(2) [amending this section] shall apply to coverage months in taxable years beginning after December 31, 2015 . may be made at any time on or after such date of enactment and before the expiration of the 3-year period of limitation prescribed in section 6511(a) with respect to such taxable year; and may be made on an amended return.” Except as otherwise provided in this subsection, the amendments made by this section [amending this section, section 7527 of this title , and former section 2918 of Title 29 , Labor] shall apply to coverage months beginning after February 12, 2011 . The amendment made by subsection (b)(2)(B) [amending section 7527 of this title ] shall apply to certificates issued after the date which is 30 days after the date of the enactment of this Act [ Oct. 21, 2011 ]. The amendment made by subsection (b)(2)(D) [amending section 7527 of this title ] shall apply to coverage months beginning after the date which is 30 days after the date of the enactment of this Act.” the amendments made by subsection (b)(1) [amending provisions set out as a note under section 6432 of this title ] shall apply to periods of coverage beginning after the date of the enactment of this Act [ Mar. 2, 2010 ]; the amendments made by subsection (b)(2) [amending provisions set out as a note under section 6432 of this title ] shall take effect as if included in the amendments made by section 1010 of division B of the Department of Defense Appropriations Act, 2010 [ Pub. L. 111–118 , amending provisions set out a note under this section]; and the amendments made by subsections (b)(3) and (b)(4) [amending provisions set out as a note under section 6432 of this title ] shall take effect on the date of the enactment of this Act [ Mar. 2, 2010 ].” Except as provided in paragraph (2), the amendments made by this section [enacting this section and section 300gg–45 of Title 42 , The Public Health and Welfare, amending section 1324 of Title 31 , Money and Finance, and renumbering former section 35 of this title as section 36 of this title ] shall apply to taxable years beginning after December 31, 2001 . The amendment made by subsection (b) [enacting section 300gg–45 of Title 42 ] shall take effect on the date of the enactment of this Act [ Aug. 6, 2002 ].” The Secretary of the Treasury shall conduct a biennial survey of eligible individuals (as defined in section 35(c) of the Internal Revenue Code of 1986) relating to the health coverage tax credit under section 35 of the Internal Revenue Code of 1986 (hereinafter in this section referred to as the ‘health coverage tax credit’). demographic information of such individuals, including income and education levels, satisfaction of such individuals with the enrollment process in the HCTC program, satisfaction of such individuals with available health coverage options under the credit, including level of premiums, benefits, deductibles, cost-sharing requirements, and the adequacy of provider networks, and any other information that the Secretary determines is appropriate. demographic information of each individual, including income and education levels, whether the individual was aware of the health coverage tax credit or the HCTC program, the reasons the individual has not enrolled in the HCTC program, including whether such reasons include the burden of the process of enrollment and the affordability of coverage, whether the individual has health insurance coverage, and, if so, the source of such coverage, and any other information that the Secretary determines is appropriate. Not later than December 31 of each year in which a survey is conducted under paragraph (1) (beginning in 2010), the Secretary of the Treasury shall report to the Committee on Finance and the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Ways and Means, the Committee on Education and Labor [now Committee on Education and the Workforce], and the Committee on Energy and Commerce of the House of Representatives the findings of the most recent survey conducted under paragraph (1). the total number of eligible individuals (as defined in section 35(c) of the Internal Revenue Code of 1986) and the number of eligible individuals receiving the health coverage tax credit, the total number of such eligible individuals who receive an advance payment of the health coverage tax credit through the HCTC program, the average length of the time period of the participation of eligible individuals in the HCTC program, and the total number of participating eligible individuals in the HCTC program who are enrolled in each category of coverage as described in section 35(e)(1) of such Code, the range of monthly health insurance premiums, for self-only coverage and for family coverage, for individuals receiving the health coverage tax credit, and the average and median monthly health insurance premiums, for self-only coverage and for family coverage, for individuals receiving the health coverage tax credit, Deductible amounts. Other out-of-pocket cost-sharing amounts. A description of any annual or lifetime limits on coverage or any other significant limits on coverage services, or benefits. In each State and nationally, the gender and average age of eligible individuals (as defined in section 35(c) of such Code) who receive the health coverage tax credit, in each category of coverage described in section 35(e)(1) of such Code, with respect to each category of eligible individuals described in such section. The steps taken by the Secretary of the Treasury to increase the participation rates in the HCTC program among eligible individuals, including outreach and enrollment activities. The cost of administering the HCTC program by function, including the cost of subcontractors, and recommendations on ways to reduce administrative costs, including recommended statutory changes. The number of States applying for and receiving national emergency grants under [former] section 173(f) of the Workforce Investment Act of 1998 ([former] 29 U.S.C. 2918(f) ), the activities funded by such grants on a State-by-State basis, and the time necessary for application approval of such grants.”