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COBRA Subsidy – Apply Now For Your 65% Credit
May 15, 2009 - By now you already know that if you offered COBRA to employees who were involuntarily terminated after September 1, 2008, you are required to pay 65% of the COBRA premium. Your 65% payment can then be taken as a credit on your next 941 payment, which is where Paycor can help! The approach for submitting your COBRA premium credit request varies based on how you process your payroll, but either way it's easy:
Paycor for Windows or Internet Entry Clients: You can now enter your own COBRA premiums within your payroll application. Simply add a manual check for the terminated employee and enter the 65% premium that you already paid under tax code ZZCOB. Your Payroll Specialist can help you set up the ZZCOB tax code to get you started.
Phone or Fax Clients: You can continue to submit your COBRA premium credit requests directly to your Payroll Specialist for processing. Click here to download a COBRA Credit Worksheet to help you organize the information we need to apply your COBRA credit. This form can be e-mailed or faxed to your Paycor Payroll Specialist.
Before you can apply for credit for the 65% premium payment, you must already have received the 35% premium payment from the involuntarily terminated employee. Paycor recommends that you maintain proper records as defined by the IRS, including receipts from your terminated employees with the date and amounts of their 35% share of the premium payment. Paycor does not need copies of this documentation. To learn more about the IRS record keeping requirements please go to www.irs.gov and search "COBRA records."
Since the American Recovery and Reinvestment Act (ARRA) was signed into law in February 2009, the IRS continues to provide updates on its Web site. Paycor has provided quick links to the IRS pages as well as summaries of ARRA questions and answers that are most beneficial to our clients. http://www.paycor.com/ARRA_FAQs.aspx
For More Information
If you have additional questions about how the ARRA impacts your payroll, please e-mail ARRAquestions@paycor.com or contact your Payroll Specialist.
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