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.

When a Growing Business Needs More Than a Bookkeeper

Has your business outgrown basic bookkeeping? If you’re facing bigger decisions, more complexity, or uncertainty about your financial future, it may be time to consider whether you need more strategic financial support than a bookkeeper can provide.

Unlocking Opportunities in a Shifting Economy

Economic upheaval doesn’t just bring challenges – it opens the door for businesses that are willing to adapt. Now is the time to rethink your operations and uncover new opportunities for growth.

Family Loans and Gifts: Avoiding a Tax Headache

When relatives lend or gift money, it can strengthen family bonds or lead to complications if not handled properly. This video explores the differences between gifts and loans in family finances, highlighting IRS guidelines and offering strategies to manage these transactions with minimal tax impact.

Common Beneficiary Mistakes That Can Wreck Your Estate Plan

Uncover common estate planning mistakes that could jeopardize your assets and learn how to avoid them. Find out why aligning beneficiary designations with your will or trust is vital and discover the benefits of setting up a trust to manage your assets effectively.

Bakes Takes Volume 1, Issue 9

This month’s Bake’s Takes explores the science of persuasion, the art of selfless networking, and the journey to relishing networking. Learn how to use principles of persuasion, build an effective network, and find a higher purpose in your networking endeavors. This curated list of reads presents an invaluable opportunity for leaders aiming to refine their strategic approach and drive impactful results.

Bakes Takes Volume 1, Issue 8

This month’s Bake’s Takes presents three powerful reads that discuss overcoming anxiety in high achievers, traits of effective teams, and reasons why leadership teams fail. It provides actionable advice on how to avoid mental traps, foster healthy collaboration, and elevate mediocre teams to high performing ones. Dive in to gain a fresh perspective on leadership challenges and strategies.

Attestation Services: An Introductory Guide

In today’s business world, trust and transparency are non-negotiable. Discover how attestation services can enhance your company’s credibility by providing independent verification of your financial information. Read our essential guide to learn how these services can drive business success and foster stakeholder confidence.