Federal Register / Vol. 89, No. 243 / Wednesday, December 18, 2024 / Rules and Regulations 102721 

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2The Affordable Care Act (or ACA) refers to the 

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by the Health Care and Education Reconciliation 

Act of 2010 (Pub. L. 111–152, enacted on March 30, 

2010). 

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[FR Doc. 2024–29647 Filed 12–17–24; 8:45 am] 

BILLING CODE 4191–02–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 10019] 

RIN 1545–BR31 

Definition of the Term ‘‘Coverage 

Month’’ for Computing the Premium 

Tax Credit 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final regulations. 

SUMMARY: This document contains final 

regulations that amend the definition of 

‘‘coverage month’’ and amend certain 

other rules in existing income tax 

regulations regarding the computation 

of an individual taxpayer’s premium tax 

credit. The coverage month amendment 

generally provides that, in computing a 

premium tax credit, a month may be a 

coverage month for an individual if the 

amount of the premium paid, including 

by advance payments of the premium 

tax credit, for the month for the 

individual’s coverage is sufficient to 

avoid termination of the individual’s 

coverage for that month. The final 

regulations also amend the existing 

regulations relating to the amount of 

enrollment premiums used in 

computing the taxpayer’s monthly 

premium tax credit if a portion of the 

monthly enrollment premium for a 

coverage month is unpaid. Finally, the 

final regulations clarify when an 

individual is considered to be not 

eligible for coverage under a State’s 

Basic Health Program. The final 

regulations affect taxpayers who enroll 

themselves, or enroll a family member, 

in individual health insurance coverage 

through a Health Insurance Exchange 

and may be allowed a premium tax 

credit for the coverage. 

DATES: 

Effective date: These final regulations 

are effective on December 18, 2024. 

Applicability date: These final 

regulations apply to taxable years 

beginning on or after January 1, 2025. 

FOR FURTHER INFORMATION CONTACT: 

Clara Raymond at (202) 317–4718 (not 

a toll-free number). 

SUPPLEMENTARY INFORMATION: 

Authority 

This document contains amendments 

to the Income Tax Regulations (26 CFR 

part 1) under section 36B of the Internal 

Revenue Code (Code).1 Section 36B(h) 

provides an express delegation of 

authority for the Secretary of the 

Treasury or her delegate (Secretary) to 

prescribe such regulations as may be 

necessary to carry out section 36B, 

including regulations that provide for 

the coordination of the premium tax 

credit (PTC) allowed under 36B with the 

program for advance payments of the 

PTC (APTC) under section 1412 of the 

Affordable Care Act.2 The final 

regulations are also issued under the 

express delegation of authority under 

section 7805(a), which authorizes the 

Secretary to ‘‘prescribe all needful rules 

and regulations for the enforcement of 

[the Code], including all rules and 

regulations as may be necessary by 

reason of any alteration of law in 

relation to internal revenue.’’ 

Background 

I. Section 36B Rules Relating to 

Coverage Months and Monthly PTC 

Amount 

Section 36B provides a PTC for 

applicable taxpayers who meet certain 

eligibility requirements, including that a 

member of the taxpayer’s family enrolls 

in a qualified health plan (QHP) through 

a Health Insurance Exchange (Exchange) 

for one or more ‘‘coverage months.’’ 

Section 1.36B–3(c)(1) provides that a 

month is a coverage month for an 

individual if (i) as of the first day of the 

month, the individual is enrolled in a 

QHP through an Exchange; (ii) the 

taxpayer pays the taxpayer’s share of the 

premium for the individual’s coverage 

under the plan for the month by the 

unextended due date for filing the 

taxpayer’s income tax return for that 

taxable year, or the full premium for the 

month is paid by APTC; and (iii) the 

individual is not eligible for the full 

calendar month for minimum essential 

coverage (within the meaning of 

§ 1.36B–2(c)) other than coverage 

described in section 5000A(f)(1)(C) of 

the Code (relating to coverage in the 

individual market). 

Section 1.36B–3(d)(1) provides that 

the PTC (also called the premium 

assistance amount) for a coverage month 

is the lesser of (i) the premiums for the 

month, reduced by any amounts that 

were refunded, for one or more QHPs in 

which a taxpayer or a member of the 

taxpayer’s family enrolls (enrollment 

premiums); or (ii) the excess of the 

adjusted monthly premium for the 

applicable benchmark plan over 1⁄12 of 

the product of a taxpayer’s household 

income and the applicable percentage 

for the taxable year. The term ‘‘family’’ 

is defined in § 1.36B–1(d), and the 

applicable percentage is defined in 

§ 1.36B–3(g). 

Section 1.36B–2(c)(2)(i) provides that, 

for purposes of determining whether a 

given month is a coverage month for an 

individual, an individual generally is 

considered eligible for governmentsponsored minimum essential coverage 

if the individual meets the criteria for 

coverage under a government-sponsored 

program described in section 

5000A(f)(1)(A) as of the first day of the 

first full month the individual may 

receive benefits under the program. 

Section 1.36B–2(c)(2)(v) provides that 

an individual is treated as not eligible 

for Medicaid, CHIP, or a similar 

program for a period of coverage under 

a QHP if, when the individual enrolls in 

the QHP, an Exchange determines or 

considers (within the meaning of 45 

CFR 155.302(b)) the individual to be not 

eligible for Medicaid or CHIP. 


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102722 Federal Register / Vol. 89, No. 243 / Wednesday, December 18, 2024 / Rules and Regulations 

Section 36B(f)(3) and § 1.36B–5 

require Exchanges to report to QHP 

enrollees and the IRS certain 

information, including monthly 

enrollment premiums, needed to 

compute the PTC allowed for the 

enrollee. This information is reported to 

enrollees on IRS Form 1095–A, Health 

Insurance Marketplace Statement. The 

Centers for Medicare & Medicaid 

Services (CMS), part of the Department 

of Health and Human Services (HHS), is 

responsible for the Form 1095–A 

reporting for Exchanges that use the 

Federal eligibility and enrollment 

platform (Federally-facilitated 

Exchanges, or FFEs, and State-based 

Exchanges on the Federal platform, or 

SBE–FPs). State Exchanges with their 

own platforms (State Exchanges) are 

responsible for the Form 1095–A 

reporting for individuals who enroll in 

a QHP through their State Exchange. 

II. HHS Rules Relating to Coverage 

When Premiums Are Unpaid 

HHS regulations at 45 CFR 156.270(d) 

implement section 1412(c)(2)(B)(iv)(II) 

of the Affordable Care Act to require 

issuers of QHPs to allow a ‘‘grace 

period’’ for enrollees for whom the 

APTC is paid but who fail to timely pay 

their share of the premium for the 

coverage. In general, a QHP issuer must 

provide a grace period of 3 consecutive 

months for such an enrollee before the 

issuer may terminate the enrollee’s 

coverage. During the first month of the 

grace period, the QHP issuer must pay 

all appropriate claims for services 

rendered, and, during the second and 

third months of the grace period, the 

QHP issuer may pend claims. 

HHS regulations at 45 CFR 155.400(g) 

allow issuers to implement a premium 

payment threshold policy under which 

issuers can consider enrollees to have 

paid all amounts due if the enrollees 

pay an amount sufficient to maintain a 

percentage of total premium paid out of 

the total premium owed equal to or 

greater than a level prescribed by the 

issuer, provided that the level and the 

policy are applied in a uniform manner 

to all enrollees. If an enrollee satisfies 

these conditions, the issuer may provide 

coverage even though the full 

enrollment premium is not paid. 

In certain States, issuers also may 

provide coverage without payment of 

the full enrollment premium if a State 

department of insurance prohibits an 

issuer from terminating QHP coverage 

during a declared emergency. 

III. Proposed Regulations 

On September 17, 2024, the 

Department of the Treasury (Treasury 

Department) and the IRS published a 

notice of proposed rulemaking (REG– 

116787–23) in the Federal Register (89 

FR 75984) under section 36B (proposed 

regulations). The proposed regulations 

would have changed the definition of 

‘‘coverage month’’ in § 1.36B–3(c)(1) for 

some scenarios for which the full 

premium for the month is unpaid by the 

unextended due date of the taxpayer’s 

return for the year of coverage, provided 

the amount of the premium paid for the 

month, including by APTC, is sufficient 

to avoid termination of the individual’s 

coverage for that month. The proposed 

regulations would have provided that a 

month for which the enrollment 

premium is not fully paid may be a 

coverage month in the following 

scenarios: (i) the first month of a grace 

period described in 45 CFR 156.270(d); 

(ii) a month for which a premium 

payment threshold under 45 CFR 

155.400(g) has been met and for which 

month the issuer of the individual’s 

qualified health plan provides coverage; 

and (iii) a month for which a State 

department of insurance has, during a 

declared emergency, issued an order 

prohibiting the issuer of the individual’s 

qualified health plan from terminating 

the individual’s coverage for the month 

irrespective of whether the full 

premium for the month is paid. 

The proposed amendment to the 

definition of ‘‘coverage month’’ would 

have required a conforming change to 

the calculation of the monthly PTC 

amount under § 1.36B–3(d)(1)(i) so that 

the premium for a month to be 

considered in determining the monthly 

PTC for an individual’s coverage would 

be reduced by any portion of the 

premium that is unpaid as of the 

unextended due date for filing the 

taxpayer’s income tax return for the 

taxable year that includes the month. 

Finally, the proposed regulations 

would have clarified § 1.36B–2(c)(2)(v) 

to provide that an individual is treated 

as not eligible for Medicaid, CHIP, or a 

similar program such as a State’s Basic 

Health Program (BHP), for a period of 

coverage under a QHP if, when the 

individual enrolls in the QHP, an 

Exchange conducts an eligibility 

determination or, if applicable, 

eligibility assessment (within the 

meaning of 45 CFR 155.302(b)) for 

Medicaid, CHIP, or a similar program 

and determines or assesses the 

individual to be not eligible for coverage 

under the program. 

The Treasury Department and the IRS 

received nine public comments in 

response to the notice of proposed 

rulemaking. Copies of the comments are 

available for public inspection at 

https://www.regulations.gov or upon 

request. A public hearing on the 

proposed regulations was scheduled for 

December 13, 2024. There were no 

requests to speak at the scheduled 

public hearing. Consequently, the 

public hearing was cancelled. After 

considering all the comments received, 

the Treasury Department and the IRS 

adopt the proposed regulations without 

modifications. 

Summary of Comments and 

Explanation of Revisions 

I. Overview 

All nine public comments on the 

proposed regulations were in support of 

the rules in the proposed regulations. 

One commenter requested that the final 

regulations include detailed 

requirements, expectations, and 

examples relating to reporting by 

Exchanges of enrollment premiums and 

second lowest cost silver plan (SLCSP) 

premiums on Form 1095–A for a month 

for which a taxpayer’s share of the 

enrollment premium is not paid in full 

(non-payment month) that may be a 

coverage month. Another commenter 

requested that all non-payment months 

for which coverage is provided be 

considered coverage months. Finally, 

several commenters requested flexibility 

for Exchanges to comply with the new 

coverage month rule. The comments are 

addressed in more detail in Parts II 

through IV of this Summary of 

Comments and Explanation of 

Revisions. 

II. Additional Guidance for Reporting on 

Form 1095–A 

As discussed in Part I of the 

Background section of this preamble, 

section 36B(f)(3) and § 1.36B–5 require 

Exchanges to report to QHP enrollees 

and the IRS certain information needed 

to compute the PTC allowed for the 

enrollee. This information is reported to 

enrollees on IRS Form 1095–A. The 

enrollee’s monthly enrollment 

premiums are reported in column A of 

Part III of Form 1095–A and the 

enrollee’s monthly second lowest cost 

silver plan (SLCSP) premiums are 

reported in column B of the form. 

The current instructions for Form 

1095–A require Exchanges to report $0 

in column A of Form 1095–A as the 

enrollment premium for a non-payment 

month. The instructions also require 

Exchanges to report $0 for a nonpayment month in column B of Form 

1095–A as the amount of the taxpayer’s 

SLCSP premium for the month. 

Reporting $0 as the monthly amount in 

either column A or column B signals to 

the taxpayer and the IRS that this is not 

a coverage month and, thus, no PTC is 

allowed for the month. 


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Federal Register / Vol. 89, No. 243 / Wednesday, December 18, 2024 / Rules and Regulations 102723 

One commenter requested that the 

final regulations include detailed 

requirements, expectations, and 

examples relating to how Exchanges 

should report enrollment premiums and 

SLCSP premiums on Form 1095–A for 

non-payment months that may be 

coverage months. The commenter asked 

that the examples demonstrate how 

Exchanges should report multiple grace 

periods in a calendar year, mid-month 

changes, and partial payments. 

The commenter’s request for detailed 

guidance on how Exchanges should 

report amounts on Form 1095–A is best 

addressed in the Instructions for Form 

1095–A, rather than in regulatory text. 

The IRS intends to revise the 2025 

Instructions for Form 1095–A to reflect 

the coverage month changes in these 

final regulations. Specifically, the 

revised instructions will require 

Exchanges to report in column A of Part 

III of Form 1095–A the full enrollment 

premium for any month that is a 

coverage month if such month is (i) the 

first month of a grace period described 

in 45 CFR 156.270(d) for the plan 

enrollees; (ii) a month for which a 

premium payment threshold under 45 

CFR 155.400(g) has been met and for 

which month the issuer of the 

individual’s qualified health plan 

provides coverage; or (iii) a month for 

which a State department of insurance 

has, during a declared emergency, 

issued an order prohibiting the issuer of 

the individual’s qualified health plan 

from terminating the individual’s 

coverage for the month (the three 

scenarios described in § 1.36B–3(c)(4)). 

The instructions will continue to 

provide that Exchanges must report $0 

in column A for any other months for 

which the full enrollment premium for 

the month is not paid, and that the 

amount reported in column A should be 

reduced by any enrollment premium 

refunds or credits. 

Similarly, the instructions for column 

B of Part III of Form 1095–A will be 

amended to provide that Exchanges 

should not report $0 as the SLCSP 

premium for any months for which the 

full enrollment premium is not paid, if 

the month is a coverage month under 

one of the three scenarios described in 

§ 1.36B–3(c)(4). Instead, Exchanges 

should report the SLCSP premium that 

would apply if the enrollment premium 

had been paid in full. 

With regard to the commenter’s 

request for examples demonstrating how 

to report amounts on Form 1095–A 

under the final regulations, the Treasury 

Department and the IRS understand that 

State Exchanges may need additional 

guidance as they proceed with 

implementation of these final 

regulations. The Treasury Department 

and the IRS welcome additional input 

and will continue to work with State 

Exchanges to ensure that the 

Instructions for Form 1095–A 

adequately address how Exchanges 

should report non-payment months as 

coverage months under one of the three 

scenarios described in § 1.36B–3(c)(4). 

III. Additional Scenarios for Which NonPayment Months May Be Coverage 

Months 

The proposed regulations included a 

request for comments on whether the 

final regulations should include 

scenarios in addition to those provided 

in the proposed regulations regarding 

non-payment months that may be 

coverage months. One commenter 

suggested that the final regulations 

should permit all non-payment months 

to be coverage months as long as the 

amount of the premium paid for the 

month, including by APTC, is sufficient 

to avoid termination of the individual’s 

coverage for that month. 

In drafting the proposed regulations, 

the Treasury Department and the IRS 

considered but rejected a rule that 

would allow all non-payment months to 

be coverage months if the amount of the 

premium paid for the month, including 

by APTC, is sufficient to avoid 

termination of the individual’s coverage 

for the month. As stated in the preamble 

to the proposed regulations, a main 

reason for amending the coverage month 

definition is to promote reporting 

consistency among Exchanges regarding 

the reporting of enrollment premiums 

for non-payment months. The Treasury 

Department and the IRS worked closely 

with HHS staff to identify the three 

scenarios described in § 1.36B–3(c)(4) as 

scenarios for which there is inconsistent 

reporting among Exchanges. In addition, 

the Treasury Department and the IRS 

have determined that an open-ended 

rule that could be interpreted differently 

by different Exchanges, based on their 

particular State law or practices, would 

not achieve more consistent reporting 

among Exchanges. Exchanges, as well as 

taxpayers and the IRS, need clarity on 

the definition of a coverage month, and 

that definition needs to apply uniformly 

to all taxpayers under the Federal tax 

law. Consequently, the Treasury 

Department and the IRS do not adopt 

this comment, and the change to the 

coverage month rule in the final 

regulations applies only for the three 

scenarios described in § 1.36B–3(c)(4). 

IV. Applicability Date of Final 

Regulations 

The proposed regulations provided 

that the changes under §§ 1.36B–2 and 

1.36B–3 were proposed to apply for 

taxable years beginning on or after the 

first date of the calendar year that begins 

after the date these regulations are 

published as final regulations in the 

Federal Register. Several commenters 

noted that State Exchanges will need to 

make extensive changes to their 

platform architecture to report for nonpayment months that are coverage 

months under one of the three scenarios 

described in § 1.36B–3(c)(4) and, thus, 

requested that the final regulations 

provide adequate time for states to make 

the necessary changes to ensure 

accurate reporting. One commenter 

stated that a 9–12-month period is 

generally needed to implement IT 

changes. Another commenter requested 

that the final rule include detailed 

scenarios addressing the applicability 

date. One commenter supported the 

proposed applicability date of the next 

calendar year following the date of 

publication. 

Consistent with the proposed 

applicability date, the rules in these 

final regulations apply to taxable years 

beginning on or after January 1, 2025. 

Thus, a taxpayer may be allowed a PTC 

for 2025 for a non-payment month that 

is a coverage month as described in 

these final regulations. However, the 

Treasury Department and the IRS 

understand that Exchanges need time to 

implement their reporting for the 

coverage month rule in the final 

regulations, and some Forms 1095–A 

filed by State Exchanges for the 2025 

coverage year may not reflect that nonpayment months described in § 1.36B– 

3(c)(4) are coverage months for which a 

PTC is allowed. Exchanges should do 

the best they can to timely implement 

the coverage month rule in these final 

regulations. Exchanges are reminded 

that, because section 36B(f)(3) imposes 

the requirement on Exchanges to report 

QHP enrollment information to the IRS 

and to Enrollees on Form 1095–A, Form 

1095–A is not an information return 

within the meaning of section 6721, and 

there is no penalty imposed on an 

Exchange for filing a Form 1095–A that 

does not include all of the information 

required to be shown on the return or 

that includes incorrect information. The 

Treasury Department and the IRS will 

continue to consult with State 

Exchanges to assist with their 

implementation of the coverage month 

rule under these final regulations. 

Finally, the proposed regulations 

included various applicability dates to 

incorporate existing applicability dates 

for prior amendments to the regulations 

under section 36B, but all of the 

amendments under §§ 1.36B–2 and 

1.36B–3 in the proposed regulations 


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102724 Federal Register / Vol. 89, No. 243 / Wednesday, December 18, 2024 / Rules and Regulations 

were proposed to apply on the same 

date. Those amendments to proposed 

§§ 1.36B–2 and 1.36B–3, as finalized in 

these regulations, all apply to taxable 

years beginning on or after January 1, 

2025. Thus, the Treasury Department 

and the IRS do not believe detailed 

scenarios are needed to address the final 

regulation’s applicability date as 

requested by one of the commenters. 

V. Conforming Change to the PTC 

Calculation and Clarification of 

Eligibility 

As noted in Part III of the Background 

section of this preamble, the proposed 

regulations addressed two items in 

addition to the change to the coverage 

month definition. First, the proposed 

regulations included a proposed change 

that would have conformed the 

calculation of the monthly PTC amount 

under § 1.36B–3(d)(1)(i) with the 

proposed rule allowing certain nonpayment months to be coverage months. 

Under the proposed rule, taxpayers 

would have reduced the amount of the 

enrollment premiums used to compute 

their monthly PTC by any portion of the 

premium that is unpaid as of the 

unextended due date of the taxpayer’s 

income tax return for the taxable year 

that includes the month. Second, the 

proposed regulations would have 

clarified § 1.36B–2(c)(2)(v) to provide 

that an individual is treated as not 

eligible for Medicaid, CHIP, or a similar 

program such as a State BHP, for a 

period of coverage under a QHP if, 

when the individual enrolls in the QHP, 

an Exchange conducts an eligibility 

determination or, if applicable, 

eligibility assessment (within the 

meaning of 45 CFR 155.302(b)) for 

Medicaid, CHIP, or a similar program 

and determines or assesses the 

individual to be not eligible for coverage 

under the program. Because no negative 

comments or suggested changes were 

received with respect to these two 

items, this Treasury decision adopts 

these amendments without change. 

VI. Severability 

If any provision in this rulemaking is 

held to be invalid or unenforceable 

facially, or as applied to any person or 

circumstance, it shall be severable from 

the remainder of this rulemaking, and 

shall not affect the remainder thereof, or 

the application of the provision to other 

persons not similarly situated or to 

other dissimilar circumstances. 

Special Analyses 

I. Regulatory Planning and Review 

Pursuant to the Memorandum of 

Agreement, Review of Treasury 

Regulations under Executive Order 

12866 (June 9, 2023), tax regulatory 

actions issued by the IRS are not subject 

to the requirements of section 6 of 

Executive Order 12866, as amended. 

Therefore, a regulatory impact 

assessment is not required. 

II. Paperwork Reduction Act 

These final regulations do not impose 

any additional information collection 

requirements in the form of reporting, 

recordkeeping requirements, or thirdparty disclosure statements. Taxpayers 

who claim PTC on their income tax 

returns are required to file Form 8962, 

Premium Tax Credit (PTC), which is the 

sole collection of information 

requirement imposed on individuals by 

section 36B and the regulations under 

section 36B. The rules in these final 

regulations will require the IRS to revise 

the instructions for Form 8962. For 

purposes of the Paperwork Reduction 

Act of 1995 (44 U.S.C. 3507(c)), the 

reporting burden associated with the 

collection of information for Form 8962 

will be reflected in the PRA submission 

associated with income tax returns 

under the OMB control number 1545– 

0074. To the extent there is a change in 

burden because of these final 

regulations, the change in burden will 

be reflected in the updated burden 

estimates for Form 8962. 

In addition, Exchanges are required to 

report to QHP enrollees on Form 1095– 

A certain information the enrollees need 

to compute the PTC allowed for the 

enrollee and to reconcile the PTC with 

any APTC paid for their coverage. 

Exchanges must also report this 

information to the IRS. The rules in 

these final regulations will require the 

IRS to revise the instructions for 

recipients of Form 1095–A and the 

instructions for Exchanges completing 

Form 1095–A. For purposes of the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3507(c)), the reporting burden 

associated with the collection of 

information for Form 1095–A will be 

reflected in the PRA submission 

associated with Form 1095–A under the 

OMB control number 1545–2232. To the 

extent there is a change in burden 

because of these final regulations, the 

change in burden will be reflected in the 

updated burden estimates for Form 

1095–A. 

III. Regulatory Flexibility Act 

The Treasury Department and the IRS 

hereby certify that these final 

regulations will not have a significant 

economic impact on a substantial 

number of small entities pursuant to the 

Regulatory Flexibility Act (5 U.S.C. 

chapter 6). This certification is based on 

the fact that the majority of the effect of 

the final regulations falls on individual 

taxpayers, and entities will experience 

only small changes. 

Pursuant to section 7805(f), the notice 

of proposed rulemaking preceding these 

regulations was submitted to the Chief 

Counsel for the Office of Advocacy of 

the Small Business Administration for 

comment on their impact on small 

business, and no comments were 

received. 

IV. Unfunded Mandates Reform Act 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 requires 

that agencies assess anticipated costs 

and benefits and take certain other 

actions before issuing a final rule that 

includes any Federal mandate that may 

result in expenditures in any one year 

by a State, local, or Tribal government, 

in the aggregate, or by the private sector, 

of $100 million (updated annually for 

inflation). This final rule does not 

include any Federal mandate that may 

result in expenditures by State, local, or 

Tribal governments, or by the private 

sector in excess of that threshold. 

V. Executive Order 13132: Federalism 

E.O. 13132 (Federalism) prohibits an 

agency from publishing any rule that 

has federalism implications if the rule 

either imposes substantial, direct 

compliance costs on State and local 

governments, and is not required by 

statute, or preempts State law, unless 

the agency meets the consultation and 

funding requirements of section 6 of the 

E.O. This rule does not have federalism 

implications and does not impose 

substantial direct compliance costs on 

State and local governments or preempt 

State law within the meaning of the E.O. 

VI. Congressional Review Act 

Pursuant to the Congressional Review 

Act (5 U.S.C. 801 et seq.), the Office of 

Information and Regulatory Affairs 

designated this rule as not a major rule, 

as defined by 5 U.S.C. 804(2). 

Statement of Availability of IRS 

Documents 

Guidance cited in this preamble is 

published in the Internal Revenue 

Bulletin and is available from the 

Superintendent of Documents, U.S. 

Government Publishing Office, 

Washington, DC 20402, or by visiting 

the IRS website at https://www.irs.gov. 

Drafting Information 

The principal author of these final 

regulations is Clara L. Raymond of the 

Office of Associate Chief Counsel 

(Income Tax and Accounting). However, 

other personnel from the Treasury 


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Federal Register / Vol. 89, No. 243 / Wednesday, December 18, 2024 / Rules and Regulations 102725 

Department and the IRS participated in 

the development of the regulations. 

List of Subjects in 26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

Adoption of Amendments to the 

Regulations 

Accordingly, the Treasury Department 

and the IRS amend 26 CFR part 1 as 

follows: 

PART 1—INCOME TAXES 

■ Paragraph 1. The authority citation 

for part 1 is amended by: 

■ 1. Removing the entry for § 1.36B–0; 

■ 2. Adding entries in numerical order 

for §§ 1.36B–1 through 1.36B–3; 

■ 3. Revising the entries for §§ 1.36B–4 

and 1.36B–5; and 

■ 4. Adding an entry in numerical order 

for § 1.36B–6. 

The additions and revisions read as 

follows: 

Authority: 26 U.S.C. 7805 * * * 

* * * * * 

Section 1.36B–1 also issued under 26 

U.S.C. 36B(h). 

Section 1.36B–2 also issued under 26 

U.S.C. 36B(h). 

Section 1.36B–3 also issued under 26 

U.S.C. 36B(h). 

Section 1.36B–4 also issued under 26 

U.S.C. 36B(h). 

Section 1.36B–5 also issued under 26 

U.S.C. 36B(h). 

Section 1.36B–6 also issued under 26 

U.S.C. 36B(h). 

* * * * * 

■ Par. 2. Section 1.36B–0 is amended 

by: 

■ 1. Redesignating the entries for 

§ 1.36B–3(c)(4) and § 1.36B–3(c)(5) as 

the entries for § 1.36B–3(c)(5) and 

§ 1.36B–3(c)(6), respectively; and 

■ 2. Adding a new entry for § 1.36B– 

3(c)(4). 

The addition reads as follows: 

§ 1.36B–0 Table of contents. 

* * * * * 

§ 1.36B–3 Computing the premium 

assistance credit amount. 

* * * * * 

(c) * * * 

(4) Scenarios for payments sufficient 

to avoid coverage termination. 

* * * * * 

■ Par. 3. Section 1.36B–2 is amended 

by: 

■ 1. Revising the first sentence in 

paragraph (c)(2)(v); 

■ 2. Revising paragraph (e)(1); and 

■ 3. Adding paragraph (e)(6). 

The revisions and addition read as 

follows: 

§ 1.36B–2 Eligibility for premium tax 

credit. 

* * * * * 

(c) * * * 

(2) * * * 

(v) * * * An individual is treated as 

not eligible for Medicaid, CHIP, or a 

similar program such as a Basic Health 

Program, for a period of coverage under 

a qualified health plan if, when the 

individual enrolls in the qualified 

health plan, an Exchange conducts an 

eligibility determination or, if 

applicable, eligibility assessment 

(within the meaning of 45 CFR 

155.302(b)) for Medicaid, CHIP, or a 

similar program and determines or 

assesses the individual to be not eligible 

for coverage under the program. * * * 

* * * * * 

(e) * * * 

(1) Except as provided in paragraphs 

(e)(2) through (6) of this section, this 

section applies to taxable years ending 

after December 31, 2013. 

* * * * * 

(6) The first sentence of paragraph 

(c)(2)(v) of this section applies to taxable 

years beginning on or after January 1, 

2025. The first sentence of paragraph 

(c)(2)(v) of this section, as contained in 

26 CFR part 1 edition revised as of April 

1, 2024, applies to taxable years ending 

after December 31, 2013, and beginning 

before January 1, 2025. 

■ Par. 4. Section 1.36B–3 is amended 

by: 

■ 1. Revising paragraph (c)(1)(ii); 

■ 2. Redesignating paragraphs (c)(4) and 

(5) as paragraphs (c)(5) and (6), 

respectively; 

■ 3. Adding new paragraph (c)(4); and 

■ 4. Revising paragraphs (d)(1)(i) and 

(n). 

The revisions and addition read as 

follows: 

§ 1.36B–3 Computing the premium 

assistance credit amount. 

* * * * * 

(c) * * * 

(1) * * * 

(ii) The taxpayer pays the taxpayer’s 

share of the premium for the 

individual’s coverage under the plan for 

the month by the unextended due date 

for filing the taxpayer’s income tax 

return for that taxable year, the full 

premium for the month is paid by 

advance credit payments, or the amount 

of the premium paid (including by 

advance credit payments) for the month 

is sufficient to avoid termination of the 

individual’s coverage for that month 

under one of the scenarios described in 

paragraph (c)(4) of this section; and 

* * * * * 

(4) Scenarios for payments sufficient 

to avoid coverage termination. The 

scenarios under which the amount of 

the premium paid (including by 

advance credit payments) for the month 

is sufficient to avoid termination of an 

individual’s coverage for that month 

under paragraph (c)(1)(ii) of this section 

are the following: 

(i) The first month of a grace period 

described in 45 CFR 156.270(d) for the 

individual. 

(ii) A month for which a premium 

payment threshold under 45 CFR 

155.400(g) has been met and for which 

month the issuer of the individual’s 

qualified health plan provides coverage. 

(iii) A month for which a State 

department of insurance has, during a 

declared emergency, issued an order 

prohibiting the issuer of the individual’s 

qualified health plan from terminating 

the individual’s coverage for the month 

irrespective of whether the full 

premium for the month is paid. 

* * * * * 

(d) * * * 

(1) * * * 

(i) The enrollment premiums, which 

are the premiums for the month for one 

or more qualified health plans in which 

a taxpayer or a member of the taxpayer’s 

family enrolls, reduced by any 

amounts— 

(A) Refunded in the same taxable year 

as the premium liability is incurred; or 

(B) Unpaid as of the unextended due 

date for filing the taxpayer’s income tax 

return for the taxable year that includes 

the month; or 

* * * * * 

(n) Applicability dates. (1) Except as 

provided in paragraphs (n)(2) through 

(4) of this section, this section applies 

to taxable years ending after December 

31, 2013. 

(2) Paragraphs (d)(1) (except for 

paragraph (d)(1)(i)) and (2) of this 

section apply to taxable years beginning 

after December 31, 2016. Paragraph (f) of 

this section applies to taxable years 

beginning after December 31, 2018. 

Paragraphs (d)(1) and (2) of § 1.36B–3, 

as contained in 26 CFR part 1 edition 

revised as of April 1, 2016, apply to 

taxable years ending after December 31, 

2013, and beginning before January 1, 

2017. Paragraph (f) of § 1.36B–3, as 

contained in 26 CFR part 1 edition 

revised as of April 1, 2016, applies to 

taxable years ending after December 31, 

2013, and beginning before January 1, 

2019. 

(3) Paragraphs (c)(4) through (6) of 

this section apply to taxable years 

beginning on or after January 1, 2025. 

Paragraph (c)(4) of this section, as 

contained in 26 CFR part 1 edition 

revised as of April 1, 2024, applies to 

taxable years beginning after December 


khammond on DSK9W7S144PROD with RULES
102726 Federal Register / Vol. 89, No. 243 / Wednesday, December 18, 2024 / Rules and Regulations 

1Aug. 29, 1935, ch. 814, title I, sec. 101 et seq., 

formerly sec. 1 et seq., 49 Stat. 977; renumbered 

title I, sec. 101 et seq., and amended Public Law 

100–690, title VIII, Nov. 18, 1988, 102 Stat. 4517. 

31, 2016, and beginning before January 

1, 2025. Paragraph (c)(5) of this section, 

as contained in 26 CFR part 1 edition 

revised as of April 1, 2024, applies to 

taxable years ending after December 31, 

2013, and beginning before January 1, 

2025. 

(4) Paragraph (d)(1)(i) of this section 

applies to taxable years beginning on or 

after January 1, 2025. Paragraph (d)(1)(i) 

of § 1.36B–3, as contained in 26 CFR 

part 1 edition revised as of April 1, 

2016, applies to taxable years ending 

after December 31, 2013, and beginning 

before January 1, 2017. Paragraph 

(d)(1)(i) of § 1.36B–3, as contained in 26 

CFR part 1 edition revised as of April 1, 

2022, applies to taxable years beginning 

after December 31, 2016, and beginning 

before January 1, 2023. Paragraph 

(d)(1)(i) of § 1.36B–3, as contained in 26 

CFR part 1 edition revised as of April 1, 

2024, applies to taxable years beginning 

after December 31, 2022, and beginning 

before January 1, 2025. 

Douglas W. O’Donnell, 

Deputy Commissioner. 

Approved: December 5, 2024. 

Aviva R. Aron-Dine, 

Deputy Assistant Secretary of the Treasury 

(Tax Policy). 

[FR Doc. 2024–29651 Filed 12–17–24; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF THE TREASURY 

Alcohol and Tobacco Tax and Trade 

Bureau 

27 CFR Part 5 

[Docket No. TTB–2022–0007; T.D. TTB–199; 

Re: Notice No. 213] 

RIN 1513–AC88 

Addition of American Single Malt 

Whisky to the Standards of Identity for 

Distilled Spirits 

AGENCY: Alcohol and Tobacco Tax and 

Trade Bureau, Treasury. 

ACTION: Final rule; Treasury decision. 

SUMMARY: This final rule amends the 

Alcohol and Tobacco Tax and Trade 

Bureau (TTB) regulations that set forth 

the standards of identity for distilled 

spirits to include ‘‘American single malt 

whisky’’ as a type of whisky that is 

produced in the United States and 

meets certain criteria. TTB proposed the 

new standard of identity in response to 

petitions and comments submitted by 

several distillers and the American 

Single Malt Whisky Commission. TTB is 

finalizing the amendments to the 

regulations to establish the standard of 

identity with some changes to reflect 

comments received. 

DATES: This final rule is effective 

January 19, 2025. 

FOR FURTHER INFORMATION CONTACT: 

Selina M. Ferguson, Regulations and 

Rulings Division, Alcohol and Tobacco 

Tax and Trade Bureau, 1310 G Street 

NW, Box 12, Washington, DC 20005; 

telephone 202–453–1039. 

SUPPLEMENTARY INFORMATION: 

Background 

TTB Authority 

The Alcohol and Tobacco Tax and 

Trade Bureau (TTB) administers 

regulations regarding the labeling of 

distilled spirits, which include those 

setting forth ‘‘standards of identity.’’ 

The authority to establish these 

standards is based on section 105(e) of 

the Federal Alcohol Administration Act 

(FAA Act),1 codified in the United 

States Code at 27 U.S.C. 205(e). That 

section authorizes the Secretary of the 

Treasury (the Secretary) to prescribe 

regulations relating to the ‘‘packaging, 

marking, branding, and labeling’’ of 

alcohol beverage containers ‘‘as will 

prohibit deception of the consumer with 

respect to such products’’ and ‘‘as will 

provide consumers with adequate 

information as to the identity and 

quality of the products.’’ Section 105(e) 

of the FAA Act also generally requires 

bottlers and importers of alcohol 

beverages to obtain approval of the 

product labels through certificates of 

label approval (COLAs) prior to bottling 

or importing alcohol beverages for sale 

in interstate commerce. 

TTB administers these FAA Act 

provisions pursuant to section 1111(d) 

of the Homeland Security Act of 2002, 

as codified at 6 U.S.C. 531(d). In 

addition, the Secretary has delegated 

certain administrative and enforcement 

authorities to TTB through Treasury 

Department Order 120–01. 

Part 5 of title 27 of the Code of 

Federal Regulations (27 CFR part 5) sets 

forth the regulations implementing 

those provisions of section 105(e) of the 

FAA Act as they pertain to distilled 

spirits. 

Classes and Types of Spirits 

The TTB regulations establish 

standards of identity for distilled spirits 

products and categorize these products 

according to various classes and types. 

See 27 CFR part 5, subpart I. As used 

in 27 CFR 5.141(a), the term ‘‘class’’ 

refers to a general category of spirits. 

Subpart I sets forth the various classes 

of distilled spirits and their 

characteristics. Examples of classes of 

distilled spirits include ‘‘whisky,’’ 

‘‘rum,’’ ‘‘gin,’’ and ‘‘brandy.’’ As used in 

§ 5.141(a), the term ‘‘type’’ refers to a 

subcategory within a class of spirits. 

These types generally have additional or 

more specific characteristics than the 

class. For example, ‘‘Cognac’’ is a type 

within the class of brandy, specifically 

grape brandy distilled exclusively in the 

Cognac region of France and meeting 

the laws and regulations of the French 

government for designation as Cognac. 

See 27 CFR 5.145(c)(2). 

The TTB labeling regulations at 27 

CFR 5.63(a)(2) require that the class and 

type of distilled spirits appear on the 

product’s label. These regulations 

provide that the class and type must be 

stated in conformity with 27 CFR part 

5, subpart I, of the TTB regulations. 

Current Standards of Identity, 

Classification of Malt Whisky, and 

Treatment of Products Labeled as 

‘‘American Single Malt Whisky’’ 

Current TTB regulations at 27 CFR 

5.143(a) set forth the standard of 

identity for the class whisky. In § 5.143, 

paragraphs (c)(2) through (18) categorize 

the specific types of whisky, such as 

‘‘Bourbon whisky’’ and ‘‘malt whisky.’’ 

The current regulations provide 

standards for identifying whisky as 

‘‘malt whisky,’’ at paragraph (c)(2), and 

‘‘whisky distilled from malt mash,’’ at 

paragraph (c)(7), but do not further 

specify standards for ‘‘single malt 

whisky.’’ Malt whisky is described as 

whisky produced at not more than 160° 

proof from a fermented mash of not less 

than 51 percent malted barley and 

stored at not more than 125° proof in 

charred new oak barrels. Such whisky 

stored in charred new oak barrels for a 

period of 2 years or more may 

optionally be further designated as 

‘‘straight’’ malt whisky. See 27 CFR 

5.143(c)(5). A ‘‘whisky distilled from 

malt mash’’ is whisky produced in the 

United States at not more than 160° 

proof from a fermented mash of not less 

than 51 percent malted barley and 

stored in used oak barrels. 

With respect to geographical 

designators such as ‘‘American,’’ 

§ 5.154(a)(3) provides that geographical 

names that are not names for distinctive 

types of distilled spirits, and that have 

not become generic, may not be used 

unless the product is produced in the 

particular place or region indicated in 

the name. Accordingly, a product 

currently designated as ‘‘American 

whisky’’ must be produced in the 

United States. Additionally, §§ 5.143(b) 


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