Jay F. Kucera, CPA, LLC

Denver CPA

303-681-6913

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Tax Tips are not a substitute for legal, accounting, tax, investment or other professional advice. Always consult with your trusted accounting advisor before acting upon any Tax Tip.

Relief from New COBRA Obligations

The federal law known as COBRA generally allows an employee terminated from employment to continue employer-provided health insurance coverage for up to

18 months. Under the new economic stimulus law, workers "involuntarily terminated" between September 1, 2008, and December 31, 2009, may be able to pay only 35% of the required premiums for a nine-month period. Employers must pay the balance.

However, if your company must make COBRA payments for employees who have been laid off or fired, your business is eligible for a new payroll tax credit. Alternatively, you may be able to reduce regular required tax deposits.

The IRS recently issued guidance for employers on this issue. Contact a tax professional for assistance.

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TAX ADVICE DISCLAIMER: In accordance with IRS Circular 230, any tax advice included in this communication, including attachments, is not intended or written to be used, and cannot be used by you or any other person or entity, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions, nor may any such advice be used to promote, market or recommend to another party any transaction or matter addressed within this communication. If you would like such advice, please contact us.

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