Vision Payroll

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a payroll tax credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS confirmed that assistance-eligible individuals (AEIs) do not lose their eligibility for premium subsidy simply because they are eligible for TRICARE health coverage. TRICARE is the health care program serving active duty service members, National Guard and Reserve members, retirees, their families, survivors and certain former spouses worldwide. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a payroll tax credit on their Form 941, Employer’s QUARTERLY Federal Tax Return, to be reimbursed for the assistance provided.

As the end of the second quarter nears, employers who are expecting to apply for a refund on their Form 941 should ensure that all amounts eligible for the credit have been reported to Vision Payroll so that we may reflect those amounts on the Form 941. Amounts reported after the Form 941 has been filed will need to be corrected through the use of Form 941-X, Adjusted Employer’s QUARTERLY Federal Tax Return or Claim for Refund. Employers should also ensure that all required documentation is maintained.

Contact Vision Payroll if you have any question on the premium reduction credit.

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a payroll tax credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS confirmed that members of military Reserve units and National Guard are considered involuntarily terminated if they are called to active duty. This is true whether the employer treats it as a termination of employment or a leave of absence. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a payroll tax credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS reviewed elected officials eligibility for the premium subsidy. The important distinction is whether or not the elected official is considered involuntarily terminated. The IRS considered three situations, as follows:

1. An elected official who runs for reelection, but is not reelected is considered involuntarily terminated.
2. An elected official prohibited by term limits from running for reelection is considered involuntarily terminated.
3. An elected official who does not run for reelection, but is eligible to do so, is not considered involuntarily terminated, even if the elected official did not run due to illness.

Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS confirmed that an employee “hired only for a limited period such as a seasonal worker or a teacher hired only for one school year” is considered involuntarily terminated for premium subsidy purposes if the employee works to the end of season or contract period, is not offered employment, and is able and willing to work. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS stated that if an insurer is providing continuation coverage under a comparable state law, the coverage still qualifies for premium subsidy even if the group health plan has terminated after the employer has gone out of business. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS stated that when an employer voluntarily provides continuation coverage when the plan is not subject to “COBRA continuation coverage”, then the subsidy does not apply to the voluntary coverage. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

The Internal Revenue Service (IRS) has released Notice 2009-27, Premium assistance for COBRA benefits. Pursuant to the American Recovery and Reinvestment Act of 2009 or ARRA, certain involuntarily terminated employees are eligible for employer-provided subsidies to help pay for their Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employers may then claim a credit on their Form 941 to be reimbursed for the assistance provided.

In recently issued guidance, the IRS stated that when an employer makes a “reasonable interpretation of the applicable statutory provisions and IRS guidance” while determining that an employee was involuntarily terminated, the IRS won’t challenge the determination for purposes of deciding if the employer is entitled to the COBRA premium reduction credit. The employer is required to maintain the supporting documentation to support the determination. Contact Vision Payroll if you have any questions on the COBRA premium reduction credit.

The Internal Revenue Service (IRS) has updated its instructions for Form 941, Employer’s QUARTERLY Federal Tax Return. Using the new guidance, employers are now instructed to report on line 12a “65% of the COBRA premiums for assistance eligible individuals” (AEIs). Previously, employers were instructed to report “COBRA assistance payments [they] made.” Also, the IRS clarified that when entering the number of AEIs provided COBRA premium assistance, reach AEI who paid a premium should count as one individual even if the premium was for a policy that covered more than one AEI. Contact Vision Payroll if you have any questions on the revised Form 941 reporting instructions.

The Internal Revenue Service (IRS) recently issued Notice 2009-28 offering guidance on the Work Opportunity Tax Credit (WOTC) under §51 of the Internal Revenue Code of 1986 (IRC). Under the American Recovery and Reinvestment Act of 2009 or ARRA, unemployed veterans and disconnected youth were both added as members of a targeted group for purposes of the WOTC.

IRC §51 defines veteran, unemployed veteran, and disconnected youth. According to Notice 2009-28 a veteran is someone:

1. Having served on active duty (other than active duty for training) in the Armed Forces of the United States (Armed Forces) for a period of more than 180 days; or
2. Having been discharged or released from active duty in the Armed Forces for a service-connected disability.

Notice 2009-28 also reiterates that an unemployed veteran is someone “certified by the designated local agency” as:

1. Having been discharged or released from active duty in the Armed Forces at any time during the 5-year period ending on the hiring date; and
2. Being in receipt of unemployment compensation under State or Federal law for not less than four weeks during the one-year period ending on the hiring date.

According to Notice 2009-28, a disconnected youth is defined as “any individual who is certified by the designated local agency” as:

1. As having attained age 16 but not age 25 on the hiring date;
2. As not regularly attending any secondary, technical, or post-secondary school during the 6-month period preceding the hiring date;
3. As not regularly employed during such 6-month period; and
4. As not readily employable by reason of lacking a sufficient number of basic skills.

Notice 2009-28 also defines “not regularly attending any secondary, technical, or post-secondary school”, “not regularly employed”, and “not readily employable by reason of lacking a sufficient number of basic skills”.

“Not regularly attending any secondary, technical, or post-secondary school” is defined as someone who “states in writing that during the six months preceding his or her hiring date, he or she has not attended a secondary, technical or postsecondary school for more than an average of 10 hours per week, not counting periods during which the school is closed for scheduled vacations.” For this purpose, a secondary school is either “a secondary school as defined in 20 USC §7801(38); or a for-profit secondary school that otherwise meets the definition in 20 USC §7801(38).”

“Not regularly employed” is defined as someone who “during each consecutive three-month period within the six months preceding his or her hiring date, the individual earned less than an amount equal to the gross amount he or she would have been paid at the [higher of the federal or applicable state] minimum wage if he or she worked 30 hours every week during the three-month period.”

“Not readily employable by reason of lacking a sufficient number of basic skills” is defined as someone who “states in writing that he or she does not have a certificate of graduation from a secondary school or a GED Certificate” or someone who “states in writing that he or she has a certificate of graduation from a secondary school or a GED Certificate that was awarded no less than 6 months preceding his or her hiring date and has not held a job or been admitted to a technical school or post-secondary school since receiving the certificate.”

In order to receive the WOTC, an employer is generally required to obtain certification on or before the day the individual begins work or to complete Form 8850 on or before the date employment is offered and to submit Form 8850 within twenty-eight days from when the individual starts employment. Notice 2009-28 provides transitional relief for employers hiring unemployed veterans or disconnected youth after December 31, 2008 and before July 17, 2009. Employers will be eligible as long as Form 8850 is submitted to the designated local agency before August 18, 2009.

Contact Vision Payroll if you have any questions on Notice 2009-28 or the WOTC.