Last week TaxMama® was at the IRS stakeholder meeting in Downtown Los Angeles. This triannual meeting between IRS and key members of the tax professional community always results in interesting experiences. One of the tidbits I’d like to share is about the special COBRA benefit in the recent tax law.
You may be aware that people who have been laid off or fired from their jobs where their insurance was “COBRA’d,” can have their employer pay 65% of the premiums. You’ll find the details here – http://www.irs.gov/newsroom/article/0,,id=204505,00.html. But here are things you need to know in order to qualify:
- You had to have been terminated before September 8th, 2008 and December 31, 2009.
- It must have been an involuntary termination. In other words, if they asked for volunteers to save someone else’s job, your kindheartedness has just cost you this benefit.
- Upon leaving (if you qualified for the program) you still have to elect to participate in the COBRA program and pay the premiums.
- This 65% benefit is covers up to 9 months of payments (not the full 18 months of COBRA benefits) – starting from February 17, 2009 – December 31, 2009.
- You have to make your COBRA insurance payments to your employer on time. If not, the employer will not pay your insurance and you will lose the benefit.
Under what circumstances are you going to lose this?
- If your employer shuts down and goes out of business, obviously they won’t be paying 65% of your premiums.
- Great news for employers – even if you make the COBRA payments at the end of the month, for payroll tax purposes, it’s as if you have made the payments on the first of the month or the first of the quarter and this can reduce any late payroll tax penalties.
- You get reimbursed for your COBRA payments by directly reducing the payroll taxes you need to submit to IRS on the Form 9401.
- If there is still a credit left over after you have paid the payroll taxes, you can either apply them to next quarter’s payroll taxes or have IRS send you a check.
News from TaxMama’s® EA Exam Course
Still hearing from students, they are passing part 1 like crazy. Only one person missed and would you believe she came “this” close with no prior background in taxation. I am very proud of her dogged persistence in getting answers to her questions!
We are just about to receive the Gleim materials, we will be shipping them to students next week.
Live Course Part 2 and Part 3…and Part 1
Remember that you can still sign up for Parts 2 and 3 of the Live Course. Part 2 is in progress right now. Part 3 starts on August 25. We will run Part I again in the fall for those registering for the live course in July. You can register for the Live Course here.
Note: We are considering offering a special session on non-residents, due to popular demand.
Coming Up Fast!
TaxMama’s® August 5th workshop on Hobby Losses will help you avoid getting audited in the first place and will help you win audits that do come up. For more details check out the following link:http://csea.org/EducationandEvents/digiTAXEducation/tabid/89/Default.aspx
Self-Study Course – Any Time
Don’t worry if you have missed the Live course for Part 1 or can’t make the dates for Part 2 and 3. The Self Study course is still a great way to learn at your own pace, on your schedule and with access to all AUDIO and VISUAL materials online from your office, your home, the beach or the International space station – anywhere your laptop, mp3 player, iPhone or Blackberry will take you. You can register at any time but why not do it now and get started on your way to a new, recession proof career – Register here.
Until next time,