(1) Employers to Receive COBRA Medical Coverage Tax Credit. The IRS released information relative to employers claiming credit for the COBRA medical premiums they pay for former employees. If your small business has had to lay off workers due the recession, this may be important for you to know. The IRS unveiled new information on their website that includes an extensive set of questions and answers for employers. In addition, the website contains a revised version of the quarterly payroll tax return that employers will use to claim credit for the COBRA medical premiums they pay for their former employees.
The American Recovery and Reinvestment Act of 2009, which became law last week, includes changes to the health benefit provisions of COBRA. Under the new law, eligible former employees, enrolled in their employer’s health plan at the time they lost their jobs, are required to pay only 35 percent of the cost of COBRA coverage. Employers must treat the 35 percent payment by eligible former employees as full payment, but the employers are entitled to a credit for the other 65 percent of the COBRA cost on their payroll tax return.
Employers must maintain supporting documentation for the credit claimed. This includes:
- Documentation of receipt of the employee’s 35 percent share of the premium.
- In the case of insured plans: A copy of invoice or other supporting statement from the insurance carrier and proof of timely payment of the full premium to the insurance carrier.
- Declaration of the former employee’s involuntary termination.
(2) Recovery Website. The federal government has created a recovery website to afford transparency and accountability to taxpayers on how the money allocated to the process will ultimately be used. If you would like to keep track of who does what with funding received, click here.(3) Department of Labor Website. Second place in getting information translated from paper to action goes to the Department of Labor. At a special "recovery" webpage (with associated links from that point) you can find a host of information on activities being implemented.
(4) PASBDC. The Pennsylvania Association of Small Business Development Centers has a spot on their main website devoted to tutorials which may be of help to you and your small business in these times. Providing links to some of our friends and partners, such as the SBA, Famee Foundation, and Corporate Turnaround, you can take advantage of free tutorials (one from the Famee Foundation is a 10-email-over-10-day tutorial geared to Marketing in times of recession) and other documented information prepared specifically to assist you in developing your knowledge base and generate ideas for coping with what's ahead.If you know of a good resource not presented here, one which translates the recovery act into action and makes it easier for us, the common man, to follow and take advantage of, please post it in the comments section.