2009 Recovery Act: Tax Benefits for Unemployed
Tax Benefits for Unemployed Workers -- COBRA subsidy
The American Recovery and Reinvestment Tax Act of 2009 provides assistance with payment of COBRA premiums for workers who are involuntarily unemployed.
Individuals who are involuntarily separated from employment between September 1, 2008 and January 1, 2010 can elect to pay 35% of their premiums for COBRA coverage and will be treated under the new law as paying the full amount. The former employer will pay the remaining 65% of the premium. In return, the employer will be able to credit its share of this temporary COBRA subsidy against wage withholdings and payroll taxes. The new law requires extremely technical application, especially with notice requirements and time-frames for eligibility for coverage. Please contact our office for more information.
Additionally, the IRS has information on the COBRA credit in a Q&A format at:
http://www.irs.gov/newsroom/article/0,,id=204708,00.html
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