Health Coverage Tax Credit

[edit] What's New in 2009?

Standard mileage rate. The standard mileage rate allowed for operating expenses for a car when you use it for medical reasons is 24 cents per mile for 2009. See Transportation under What Medical Expenses Are Includible.

COBRA continuation coverage. If you involuntarily lost your job between September 1, 2008, and December 31, 2009, you may qualify for a 65% reduction in premiums for COBRA continuation coverage for up to nine months. The premium reduction is not included in your gross income. You cannot claim the health coverage tax credit for any month that you receive this premium. Also, certain TAA-eligible and PBGC recipients qualify for an extension of COBRA benefits.For more information, see . COBRA Premium Assistance.

Health coverage tax credit. The health coverage tax credit (HCTC) is increased to 80% of your premium for qualified health insurance for eligible coverage months beginning after April 30, 2009, and before 2011. The increase also applies to the advance payment of credit for health insurance costs under the advance payment program.For eligible coverage months beginning in 2010, the HCTC will continue to apply to family members after certain events. Eligibility for Medicare. Once you, the eligible individual, qualify for Medicare, the HCTC will be determined for your qualifying family members for 24 months from the month you first qualify for Medicare. Divorce. If you, the eligible individual, and your spouse are divorced, your spouse will continue to be an eligible individual for 24 months from the date the divorce is finalized. Only family members who were qualifying family members immediately before the divorce was final qualify for this extension. Death. In the case of the death of the eligible individual, the spouse and other qualifying family members who qualified immediately before the death of the qualifying individual will be treated as an eligible individual for 24 months from the date of death.

Standard mileage rate. The standard mileage rate allowed for operating expenses for a car when you use it for medical reasons is:
- 19 cents per mile from January 1–June 30, and
- 27 cents per mile from July 1–December 31, 2008.

Diagnostic medical tests. The following medical procedures and devices have been determined to be medical expenses:
- An annual physical examination.
- A full-body electronic scan.
- A pregnancy test kit.

Changes to the Medical Saving Accounts:
- Archer MSAs: For 2008 and 2009, the minimum annual deductible, maximum annual deductible, and the maximum out-of-pocket expenses limit have increased.
- Health Savings Accounts (HSAs): The minimum/maximum annual deductible, out-of-pocket expenses,and maximum contribution amounts have increased for 2008 and 2009.
- Long-Term Care Premiums: For 2008 and 2009, the maximum amount of qualified long-term care premiums includible as medical expenses has increased. See the IRS page Long-Term Care Premiums.
- Health Flexible Spending Arrangements (FSAs)

A special rule allows amounts in a health FSA to be distributed to reservists ordered or called to active duty.

Standard mileage rate. The standard mileage rate allowed for operating expenses for a car when you use it for medical reasons is 20 cents per mile. See Transportation under What Medical Expenses Are Includible.

Retired public safety officers. If you are a retired public safety officer, do not include as medical expenses any health or long-term care insurance premiums that you elected to have paid with tax-free distributions from a retirement plan. This applies only to distributions that would otherwise be included in income. For more information, see Insurance Premiums for Retired Public Safety Officers in Publication 575.