The Internal Revenue Service has a Web site for employers to claim credit for the COBRA medical premiums they pay for their former employees.
The information, available at IRS.gov, includes an extensive set of questions and answers about the requirements set forth as part of The American Recovery and Reinvestment Act of 2009. The site also contains a revised version of the quarterly payroll tax returns that employers use to claim credit for the COBRA premiums.
Form 941, the employers’ quarterly federal tax return, will be sent to 2 million employers this month. The form is used to claim the premium assistance payment credit, beginning during the first quarter of 2009.
Employers must maintain supporting documentation for the credit claimed. This includes:
Documentation of receipt of the employee’s 35 percent share of the premium.
In the case of insured plans: A copy of invoice or other supporting statement from the insurance carrier and proof of timely payment of the full premium to the insurance carrier.
Declaration of the former employee’s involuntary termination.