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Health Coverage Tax Credit (HCTC) in Madison, WI 2026

Calculate your health coverage tax credit (hctc) tax savings in Madison, Wisconsin. With Wisconsin's 7.65% state tax rate, your combined savings are higher.

Wisconsin Tax Context

State Income Tax
7.65%
Local Income Tax
None
Property Tax Rate
1.78%
Tax Burden
Very High

State capital; University of Wisconsin; very high quality of life

$5,000
Est. Total Savings
No Limit
Max Deduction
Tax Credit
Deduction Type
29.6%
Combined Tax Rate

Health Coverage Tax Credit (HCTC) Savings Calculator for Madison

$
$

Federal Savings

$5,000

22% bracket

Wisconsin State

$0

7.65% rate

Local Tax

$0

0% rate

Total Savings

$5,000

29.6% combined

Tax credits reduce your tax bill dollar-for-dollar, regardless of your tax bracket.

Savings by Tax Bracket in Madison

10%
$5,000
12%
$5,000
22%
$5,000
24%
$5,000
32%
$5,000
35%
$5,000
37%
$5,000

Includes 7.65% Wisconsin state tax on top of federal savings.

Eligibility Requirements

Trade-displaced workers receiving TAA benefits and PBGC pension recipients

  • 1Must receive Trade Adjustment Assistance
  • 2Or be a PBGC pension recipient aged 55-64
  • 3Covers 72.5% of qualified health insurance premiums

Wisconsin residents should verify that this deduction is also recognized on their state tax return for additional savings of up to 7.65%.

Common Mistakes to Avoid

  • !Not filing monthly with the IRS for advance payments
  • !Missing open enrollment periods
  • !Not keeping proof of qualifying coverage
  • !Forgetting to claim the deduction on your Wisconsin state return (missing 7.65% additional savings)

Required Tax Forms

Form 8885Form 1040

File these forms with your federal tax return to claim the health coverage tax credit (hctc). Wisconsin may require additional state-specific forms.

Other Tax Deductions in Madison, WI

Medical & Dental Expenses

Medical

~$4,043
est. savings

Self-Employed Health Insurance

Medical

~$6,739
est. savings

HSA Contribution Deduction

Medical

~$2,426
est. savings

Long-Term Care Insurance

Medical

~$2,695
est. savings

Medical Travel Expenses

Medical

~$1,078
est. savings

Flexible Spending Account (FSA)

Medical

~$1,213
est. savings

Medical Equipment & Devices

Medical

~$2,022
est. savings

Therapy & Counseling

Medical

~$2,695
est. savings

Health Coverage Tax Credit (HCTC) in Other Wisconsin Cities

Milwaukee, WI

7.65% state tax

~$3,200
-1,800 vs Madison

Green Bay, WI

7.65% state tax

~$3,200
-1,800 vs Madison

Kenosha, WI

7.65% state tax

~$3,200
-1,800 vs Madison

Racine, WI

7.65% state tax

~$3,200
-1,800 vs Madison

Appleton, WI

7.65% state tax

~$3,200
-1,800 vs Madison

Waukesha, WI

7.65% state tax

~$3,200
-1,800 vs Madison

Eau Claire, WI

7.65% state tax

~$3,200
-1,800 vs Madison

Oshkosh, WI

7.65% state tax

~$3,200
-1,800 vs Madison

Calculate Your Full Tax Savings in Madison

Use our free tax calculators to optimize your entire tax return for Wisconsin.

Income Tax CalculatorTaxes in MadisonFull Health Coverage Tax Credit (HCTC) Guide

Frequently Asked Questions

How much can I save with the Health Coverage Tax Credit (HCTC) in Madison, WI?

In Madison, Wisconsin, the health coverage tax credit (hctc) can save you an estimated $5,000 per year. This includes $5,000 in federal tax savings and $0 in Wisconsin state tax savings. The national average savings is $3,200/year.

What is the Wisconsin state income tax rate for Madison residents?

Wisconsin has a 7.65% state income tax rate. Madison residents have no additional local income tax. State capital; University of Wisconsin; very high quality of life

Who qualifies for the Health Coverage Tax Credit (HCTC) in Madison?

Trade-displaced workers receiving TAA benefits and PBGC pension recipients. The eligibility requirements are the same whether you live in Madison or elsewhere in the U.S., as this is a federal tax credit. However, your savings amount will vary based on Wisconsin's 7.65% state tax rate.

What tax forms do I need to claim the Health Coverage Tax Credit (HCTC) in Wisconsin?

To claim the health coverage tax credit (hctc), you need to file Form 8885 and Form 1040 with your federal return. Wisconsin residents should also check if the state allows this deduction on their state return, which could provide an additional 7.65% savings. Filing status affects your deduction limits and tax bracket.

Is the Health Coverage Tax Credit (HCTC) better in Madison than in states without income tax?

Yes, Madison residents benefit more because Wisconsin's 7.65% state income tax means the deduction reduces both your federal AND state tax liability. In states with no income tax (like Texas, Florida, or Nevada), this deduction only reduces federal taxes. Your combined rate of 29.6% means more savings per dollar deducted.

Related Calculators

Medical & Dental Expenses in Madison

Avg savings: $3,000/year

Self-Employed Health Insurance in Madison

Avg savings: $5,000/year

HSA Contribution Deduction in Madison

Avg savings: $1,800/year

Long-Term Care Insurance in Madison

Avg savings: $2,000/year

Medical Travel Expenses in Madison

Avg savings: $800/year

Flexible Spending Account (FSA) in Madison

Avg savings: $900/year