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COBRA Subsidy Information
IRS Releases Information to Help Employers Claim COBRA Medical Coverage Credit on Payroll Tax Form
IR-2009-15, Feb. 26, 2009
WASHINGTON — The Internal Revenue Service today released new detailed information that will help employers claim credit for the COBRA medical premiums they pay for their former employees.
The IRS unveiled new information on this Web site, IRS.gov, that includes an extensive set of questions and answers for employers. In addition, the Web site 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.
Form 941, Employer’s Quarterly Federal Tax Return, will also be sent to about 2 million employers in mid-March. The form is used to claim the new COBRA premium assistance payments credit, beginning with the first quarter of 2009.
“This is the first step in our effort to provide employers with information on this important health benefit for people who have lost their jobs,” said IRS Commissioner Doug Shulman. “We will continue our work in the weeks ahead to help employers implement this crucial change for the nation’s unemployed.”
The American Recovery and Reinvestment Act of 2009, which became law last week, includes changes to the health benefit provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, commonly referred to as COBRA. The new law will affect former employees and their families, employers and others involved in providing COBRA coverage.
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.
COBRA provides certain former employees, retirees, spouses, former spouses and dependent children the right to temporary continuation of health coverage at group rates. COBRA generally covers health plans maintained by private-sector employers with 20 or more full and part-time employees. It also covers employee organizations or federal, state or local governments. It does not apply to churches and certain religious organizations. The new COBRA subsidy provisions also apply to insurers required to offer continuation coverage under state law similar to the federal COBRA.
More information about COBRA payments and the new law is available on www.dol.gov.
Got a QuickBooks Mess? Call The QuickBooks Gal!
Welcome to the QuickBooks Minute.
I’m Jayne Miller, the QuickBooks Gal
Recently, one of our Reno QuickBooks customers asked about "unapplying" credits in QuickBooks. While there are nicely labeled apply credits buttons, there are none marked unapply. This is the case for both customers (invoicing) and vendors (paying bills).
So here is how it is done:
For customers, it is a fairly easy process. Go to the invoice to which the credit was applied. Then click on the "Apply Credits" button. In the lower half of the new window that pops up is a list of Previously Applied Credits. Simply find the one, or ones you wish to unapply and click on the check mark next to it to make the check mark disappear. The credit will no longer be applied or tied to that invoice.
For Vendors, i.e. bill payments, it is not as clean and simple. The only way to unapply a credit in such a case is to Delete the credit. You can then re-enter the credit…
Welcome to another QuickBooks Gal Minute. I'm Jayne Miller, The QuickBooks Gal. Do you need to produce a report by Employee that lists only Employee Name and Wage Rate?In QuickBooks that's easy! Here's how to modify a standard report to include the data you want to report.
In the top tool bar, select ReportsSelect Employees & PayrollSelect Employee Contact List from the drop-down listOnce inside the report, select Modify Report in the report tool barIn the "column" section, remove the check marks from the information choices you don't need.In the "column" section, place a check mark next to "Employee"In the "column" section, place a check mark next to "Earnings/1 Rate"This will customize the report to include only employee names & salary/wage amounts.
As you explore the Modify window, you will find that there are many useful information options you can use to create really great custom reports...by the way, you can…
Welcome to the QuickBooks Minute. I’m Jayne Miller, the QuickBooks Gal
Do you know the difference between a QuickBooks Back up (.qbb), QuickBooks Portable file (.qbm), Accountant's Copy (.qbx) and a QuickBooks Company file (.qbw)?
As a consultant & a bookkeeper, I am often asked what's the difference between these types of files.
Many times a client will bring me their work along with what they think is a backup when, in fact, they have just copied the entire QuickBooks company file.
Of course, I can't restore from that type of file, however I can drag & drop it into the proper directory on my computer in order to process their work.
However, if they had just brought a backup or portable file, then I could have restored and worked just as easily and they would not risk their company file by copying it....I am always afraid that I might accidentally delete it, so I stay away from that option!