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Health Benefit Plan Credit (code 23)

 UC §59-10-1023

General Information

Amounts not included in your federal taxable income and amounts used to claim a federal credit cannot be used for this credit.

You may claim this credit if you purchased your own health insurance and were not eligible to participate in a health benefit plan maintained and funded through an employer or former employer. You do not qualify for this credit if you (or your spouse, if filing a joint return) had the option to get health insurance through an employer or former employer, even if you chose not to use the employer’s plan.

Definition

A health benefit plan is a policy, contract or agreement offered by a carrier to pay for or reimburse health care costs.
Health benefit plans do not include:

  • accident and disability income insurance;
  • liability and supplemental liability insurance;
  • workers compensation insurance;
  • automobile medical insurance;
  • credit-only insurance;
  • on-site medical coverage;
  • insurance where health care is not the main benefit;
  • separate dental, vision, hearing, long-term care or home health plans;
  • insurance for a specific illness or disease;
  • fixed indemnity insurance;
  • Medicare supplemental insurance;
  • self-insurance; or
  • other similar coverage.

Excluded Amounts

You must exclude the following amounts when calculating the credit:

  • Amounts used to calculate a federal Health Coverage Tax Credit (HCTC) for Trade Adjustment Assistance (TAA) recipients, alternate TAA recipients or Pension Benefit Guaranty Corporation (PBGC) pension recipients (IRC Section 35)
  • Payments into or for an Archer Medical Savings Account (MSA), Health Savings Account (HSA), Health Flexible Spending Accounts (FSA) or Health Reimbursement Arrangement (HRA) (IRC Section 106)
  • Pre-tax employer contributions to cafeteria or employer plans covering employees who may choose among two or more cash and qualified benefits (IRC Section 125)
  • Trade or business expenses for self-employed persons up to 100 percent of premiums paid but not more than your net business income (under IRC Section 162)
  • Amounts deducted on federal Schedule A (IRC section 213)
  • Amounts paid on your behalf by a third party, such as government subsidies through Medicaid
  • Payments for Medicare supplemental plans (Medigap).
  • Fees or co-pays for Children’s Health Insurance Program (CHIP) and Primary Care Network (PCN) programs run by the Utah Department of Health, or similar programs run by other states.

Included Amounts

You may include the following amounts when calculating the credit:

  • Payments for a health benefit plan through an Affordable Care Act (ACA) marketplace. You may also include any extra amounts you had to pay for the plan on your federal income tax return, but you must subtract any amounts refunded to you on your federal tax return.
  • Medicare Plan A premiums, if you are required to pay them (most people are not).
  • Medicare Plan B premiums, even if the payments are deducted from your social security benefits.
  • Payments for healthcare plans offered by private insurance carriers approved by Medicare (Medicare Plan C, Medicare Advantage).
  • Payments for Medicare Plan D (drug) plans offered by private insurance carriers and approved by Medicare.
  • Payments for a health benefit plan connected to Medicaid. Do not include amounts paid by Medicaid.
  • Payments through COBRA for a former employer’s insurance plan.

Credit Calculation

There is no form for this credit. Keep all related documents with your tax records.

Credit Calculation
1. Amount paid for health benefit plan in 2019 $

2*. Enter your excess advance premium tax repayment from your 2018 federal return:

  • 1040, Schedule 2, line 2
  • 1040NR, line 44
$*
3. Add line 1 and line 2 $

4*. Enter your net premium tax credit from your 2018 federal form:

  • 1040, Schedule 3, line 9
  • 1040NR, line 65
$*
5. Subtract line 4 from line 3 $
6. Excluded amount (see instructions, above) $
7. Subtract line 6 from line 5 (if less than zero, enter “0”) $
8. Multiply line 7 by 5% (.05)  

9. Enter maximum credit allowed per return:

  • $300 for single taxpayer with no dependents
  • $600 for married filing jointly with no dependents
  • $900 for all taxpayers with dependents
$
10. Enter the lesser of line 8 or line 9. This is your credit. $

Enter the credit amount from line 10 above on TC-40A, Part 3, using code 23.

* Enter an amount on line 2 or line 4 only if you claimed the Health Benefit Tax Credit on your 2018 Utah return.