COBRA Subsidy Extension Update

The Internal Revenue Service announced (IR-2010-9) that The American Recovery and Reinvestment Act of 2009 (ARRA) was amended to extend eligibility for the COBRA premium subsidy. This amendment extends the length of the COBRA subsidy period from nine months to 15 months for individuals who are eligible for COBRA continuation coverage related to an involuntary termination occurring between September 1, 2008 and February 28, 2010.


For eligible individuals whose nine months of COBRA subsidy payments has ended, the new law provides an extended period for them to make retroactive payments for their 35% share of COBRA premiums.

Employers must provide COBRA coverage to individuals who are eligible for the subsidy and who pay 35% of the COBRA premium. Employers are reimbursed for the other 65% by claiming a credit for the subsidy on their payroll tax returns. Employers must maintain supporting documentation for the claimed credit.

Group health plan administrators and others responsible for administering a federal COBRA subsidy program must notify assistance-eligible individuals by February 17 to inform them that the plan has been extended and expanded. The U.S. Department of Labor issued updated model notices reflecting these extensions.

If you have questions, please contact us at 404-262-7920 or via our website at http://www.joneskolb.com/.

Haiti and Charitable Donations

We at Jones and Kolb join others in concern for the victims of the recent Haiti earthquake. Many individuals, businesses and charitable organizations wish to provide assistance to the victims. To help you find information about how to provide assistance through a charitable organization, consult Disaster Relief Resources for Charities and Donors on IRS.gov.

Contributions to domestic tax-exempt, charitable organizations that provide assistance to individuals in foreign lands qualify as tax-deductible contributions for federal income tax purposes, provided that the U.S. organization has control and discretion over the use of funds. Donors should ensure that they make contributions to qualified charities. Use the Search for Charities function on IRS.gov to see if the charity you intend to support is a qualified charity listed in Pub. 78. Certain organizations, such as churches or governmental organizations, may be qualified to accept charitable contributions even though they are not listed in Pub. 78.

On January 22, President Obama signed a bill (H.R. 4462) allowing taxpayers to deduct charitable cash contributions on their 2009 tax returns. These contributions must be made before March 1, 2010 to be eligible. The IRS has also issued Notice 2010-6 designating the Haiti earthquake as a qualified disaster for federal tax purposes.