Retroactive PBGC payments may support an HCTC credit

Plain-English summary

Chief Counsel's advice considers whether a retroactive payment from the Pension Benefit Guaranty Corporation can count toward the health coverage tax credit for a particular month. The advice states that the statute requires payments to be received “for” a month, not necessarily “in” or “during” that month. A retroactive payment applied to a month therefore may qualify as a payment for that month. The advice notes that other eligibility conditions, including age, Medicare or employer-subsidized coverage, and qualified health insurance, may still need to be satisfied.

Ruling snapshot

• Question: Can a retroactive PBGC payment applied to a month support the health coverage tax credit for that month?
• Outcome: Advice given
• Key authorities: IRC § 35

Full text (IRS public release)

ID: CCA_2012022311414856 Number: 201220031
Release Date: 5/18/2012
Office: ------------------------
UILC: 35.01-00

From: ---------------------------
Sent: Thursday, February 23, 2012 11:41:53 AM
To: ----------------
Cc: ---------------------------------------
Subject: RE: "Retroactive" PBGC payments for the HCTC

If this is the only issue, I’d grant him the credit. (Some other possible issues include whether he in ------ was at least age 55, whether he was not receiving Medicare or employer-subsidized coverage, and whether his health coverage was qualified health insurance.) The statute requires that he receive payments from the PBGC "for" a month, not "in" or "during" a month. A retroactive payment applied to a month is a payment "for" that month.