COBRA: Possible Payroll Tax Credit Allowed on Form 941
By Ron Cohen, CPA, MST
Partner
Greenstein, Rogoff, Olsen & Co., LLP
Update: 12/2/09
This law has expired. There is some discussion in Congress of extending it, but at of 12/2/09, the COBRA benefits are no longer available.
Under the American Recovery and Reinvestment Act of 2009, certain individuals
who are eligible for COBRA continuation health coverage, or similar coverage
under state law, may receive a subsidy for 65 percent of the premium. These
individuals are required to pay only 35 percent of the premium.
The employer may recover the subsidy provided to assistance-eligible
individuals by taking the subsidy amount as a credit on its quarterly
employment federal payroll tax return (Form 941). The employer may provide the
subsidy — and take the credit on its employment tax return — only after it has
received the 35 percent premium payment from the individual.
For more information, please see:
http://www.irs.gov/newsroom/article/0,,id=204708,00.html
Please call GROCO is you have any questions: (510) 797-8661.
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