* COBRA SUBSIDY. The subsidy for COBRA health insurance
premiums, which expired March 31, has been extended through May 31,
2010. The "Continuing Extension Act of 2010" was signed on
April 15. It provides a continuation of the 65% subsidy for workers who
lose their jobs between September 1, 2008 and May 31, 2010. The subsidy is available for up to 15
months.
* NEW 2010 TAX CREDIT. The recent health care
reform legislation includes a new tax credit for certain small
businesses that provide health insurance to their employees. The IRS is
in the process of mailing postcards to more than four million small
businesses and tax-exempt organizations to make then aware of this new
credit for 2010.
- The credit is generally available to small
companies and tax-exempts that pay at least 50% of the cost of single
coverage for their employees. For 2010, the maximum credit is 35% of
premiums paid by businesses and 25% of premiums paid by tax-exempt
organizations.
- The maximum credit goes to those employers
with ten or fewer full-time equivalent employees who pay annual average
wages of less than $25,000. The credit gradually phases out for firms
with average wages between $25,000 and $50,000 and between 10 and 25
employees.
* HIRE ACT CERTIFICATION. The HIRE Act,
passed in March 2010, provides tax incentives for companies to hire
unemployed workers. One of those incentives is an exemption from
social security payroll taxes for qualified workers hired after
February 3, 2010, and before January 1, 2011.
- The IRS has released Form W-11 which is to
be filled out by the new hire, certifying under penalty of perjury that
he or she was either unemployed or worked fewer
than a total of 40 hours during the 60 days prior to taking the current
job.
- The W-11 forms are not filed with the IRS;
they are to be kept by the employer along with other payroll records.
