IRS gives an update for COBRA under the American Rescue Plan Act of 2021

by | May 24, 2021

The IRS released a notice providing guidance for employers, plan administrators and health insurers regarding the new tax breaks available under the American Rescue Plan Act of 2021 for the continuation of health coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).

Under the American Rescue Plan Act of 2021, there’s a temporary 100% reduction in the premium that individuals have to pay when they elect COBRA continuation health coverage plans after a reduction of hours or involuntary termination of employment. The new law provides a corresponding tax credit for the employers and insurers that maintain group health plans. The premium reduction and the tax credit are also available to continuation coverages for similar events related to State laws, often referred to as “mini-COBRA.”

The notice provides key information on calculating the credit, eligibility of individuals, and the assistance period as well as other details about the credit that is available. For more information, please read Notice 2021-31 or reach out to us to further assistance.

Questions or Want to Talk?

Call us directly at 972.221.2500 (Flower Mound) or 940.591.9300 (Denton),
or complete the form below and we’ll contact you to discuss your specific situation.

Tax Tip – IRAs for Young Adults

As we navigate the complexities of financial planning, one opportunity stands out for young adults: individual retirement accounts (IRAs). With the 2023 tax-year contributions deadline fast approaching on April 15, 2024, now is the perfect time to consider how you can leverage an IRA.

New Crypto Rules Likely Coming

If you invest or trade in Bitcoin, non-fungible tokens (NFTs), Stablecoins, or other digital assets, prepare for sweeping new tax reporting requirements.  Congress wants the IRS to crack down on taxpayers who buy and sell crypto but don’t report or pay tax on their gains.

IRS Opens ERC Voluntary Disclosure Program

In the world of real estate, the Section 1031 exchange has been a significant tool for investors who want to grow their real estate portfolio and wealth. In this video, we’ll explain how a 1031 exchange works and important considerations when using one.