U.S. DEPARTMENT OF LABOR
Employment and Training Administration
Washington, D. C. 20210

CLASSIFICATION

TAA/Health Ins. Tax Credit

CORRESPONDENCE SYMBOL

OWS

ISSUE DATE

December 3, 2002

RESCISSIONS

None

EXPIRATION DATE

Continuing

ADVISORY

:

TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 16-02

 

TO

:

ALL STATE WORKFORCE LIAISONS
ALL STATE WORKFORCE AGENCIES

 

FROM

:

EMILY STOVER DeROCCO
Assistant Secretary

 

SUBJECT

:

Health Insurance Tax Credit for Eligible Trade Adjustment Assistance Recipients

  1. Purpose. To notify state workforce liaisons and One-Stop Center System Managers of a draft notice that will be sent to potentially eligible TAA recipients pursuant to Unemployment Insurance Program Letter (UIPL) No. 05-03 to advise them of the health insurance tax credit and the related requirements.

  2. References. The Trade Act of 1974, as amended (P.L. 93-618, as amended); the Trade Adjustment Assistance Reform Act of 2002 (P.L. 107-210); 20 CFR 617; 29 CFR 90; General Administration Letter 7-94 with Changes 1, 2, and 3; UIPL No. 02-03 dated October 10, 2002; and Training and Employment Guidance Letters Nos. 10-02 and 11-02 dated October 10, 2002.

  3. Background. The Trade Adjustment Assistance Reform Act of 2002 (the Act) authorized a federal income tax credit for health insurance premiums paid by eligible TAA recipients (as well as certain other groups). The health insurance tax credit will be available for qualified health insurance payments made by eligible individuals beginning December 2002, and individuals can claim the credit for December on their 1040 tax returns filed for CY 2002. State agencies were asked to provide a list of potentially eligible TAA recipients to the Internal Revenue Service (IRS) by November 22, 2002. The IRS will be issuing information packets about the health insurance tax credit along with a form and instructions for claiming the credit on 2002 returns. However, this information will not be issued until January 2003. In addition, states will be required to issue an IRS form (Form 8887) for tax year 2002 to individuals who received TRA or would have been eligible to receive TRA had their UI been exhausted during December 2002.

  4. Action Required. This advisory should be provided to appropriate staff so they are aware of the notices being sent to potentially "eligible TAA Recipients" so that these individuals have as much information as soon as possible about the tax credit.

  5. Administrative Costs. Funding from National Emergency Grants (NEG) will be available to cover administrative costs for activities described in this advisory and other activities related to this health insurance tax credit. States will need to submit requests for funding according to special application procedures for NEG funds, as outlined in the Training and Employment Guidance Letter No. 10-02 issued on October 10, 2002. States may request funding for pre-award costs for activities described above that were undertaken subsequent to the passage of the Act.

  6. Inquiries. Please direct all inquiries to the appropriate regional office.

  7. Attachments. Draft Notice to Potentially Eligible TAA Recipients.