COBRA Premium Assistance Notes

Posted by Andy
Here are a few notes on the federal COBRA Premium assistance program under the American Recovery and Reinvestment Act.
  • Eligible workers pay 35 percent of the premium to their former employers.
  • The employer receives a payroll tax credit on form 941/944 for the other 65%.
  • To qualify you must have been involuntarily separated from your job between Sept. 1, 2008, and May 31, 2010.
  • This subsidy is reduced if your filing status is single and your modified adjusted gross income exceeds $125,000 ($250,000 if you file a joint return). If your modified adjusted gross income exceeds $145,000 ($290,000 for joint filers), you do not qualify for the subsidy.
  • For assistance-eligible individuals, the qualifying event must occur on or before March 31, 2010, and the COBRA subsidy may apply for up to nine months. (03/1710)
  • An employer may reduce its payroll tax deposits during a quarter by the amount of subsidy provided during the quarter. However, in all cases, credit for the subsidy must be claimed on the employer’s payroll tax return.
More info can be found here.
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