TIGTA: More Than Half of Those Receiving Health Coverage Tax Credit Were Ineligible

Chris Gaetano
Published Date:
May 25, 2017

The Treasury Inspector General for Tax Administration said in a recent report that about 57 percent of those the IRS sent Health Coverage Tax Credits (HCTC) to had characteristics that should have disqualified them from the program. 

The credit, which was established to help certain displaced workers and retirees pay for health insurance, covers 72.5 percent of the cost of qualified health insurance premiums for eligible individuals and qualified family members. The IRS issued about $5.8 million worth of these credits to 1,220 individuals covering the months of July 2016 through December 2016. TIGTA found, however, that many of those identified by the Pension Benefit Guaranty Organization as potentially eligible to claim the credit did not, in fact, meet the requirements. Of the 896,213 identified as eligible, 506,396 (57 percent) had a characteristic that disqualified them from claiming it. 

TIGTA recommended that the Commissioner, Wage and Investment Division, develop processes and procedures to ensure that individuals meet HCTC eligibility qualifications before adding eligibility indicators to their tax accounts. IRS management agreed with this recommendation and plans to request programming changes that will perform the requisite automated checks to ensure that taxpayers who do not meet eligibility requirements do not receive eligibility indicators on their tax account

Click here to see more of the latest news from the NYSSCPA.