| Just as in previous tax years, 2009 brings new | | | | Employers, use line 12a of 941 2009 to report the |
| changes to the different payroll tax forms and | | | | COBRA premium assistance payments you made. |
| regulations. Below is a summary of “What's | | | | Only report the premium assistance payments you |
| New” for Form 941 2009. | | | | made for the assistance eligible individuals who have |
| | | | | paid their reduced premiums. This amount should be |
| | | | | 65% of the total COBRA premiums for assistance |
| Social Security Wage Base for 2009 | | | | eligible individuals without regard to the reduction. Do |
| | | | | not include any amounts paid to you by the COBRA |
| Do not withhold social security tax after an | | | | assistance eligible individuals. For COBRA coverage |
| employee reaches $106,800 in social security wages | | | | provided under a self-funded plan, COBRA premium |
| in 2009. For 2008 the limit was $102,000. There is no | | | | assistance payments are treated as having been |
| limit on the amount of wages subject to Medicare | | | | made for each assistance eligible individual who pays |
| tax. Social security and Medicare payroll taxes apply | | | | 35% of the COBRA premium. |
| to the wages of household workers you pay $1,700 | | | | |
| or more in cash. Social security and Medicare taxes | | | | Correcting a previously filed Form 941 |
| apply to election workers who are paid $1,500 or | | | | |
| more. For employers using a payroll software, the | | | | If you discover an error on a previously filed Form |
| correct SS Wage Base is automatically used when | | | | 941, make the correction using the new payroll form, |
| calculating taxes and generating payroll forms like | | | | 941-X. The IRS has developed Form 941-X, Adjusted |
| 2009 941. | | | | Employer's QUARTERLY Federal Tax Return or Claim |
| | | | | for Refund, to replace Form 941c, Supporting |
| COBRA premium assistance payments credit | | | | Statement to Correct Information. Use Form 941-X |
| | | | | to make corrections to previously filed Forms 941. Do |
| The American Recovery and Reinvestment Act of | | | | not attach Form 941-X to Form 941; file Form 941-X |
| 2009 (ARRA) provides for premium reductions and | | | | separately. |
| additional election opportunities for health benefits | | | | |
| under COBRA. Eligible individuals pay only 35 percent | | | | Using a payroll software can save employers |
| of their COBRA premiums and the remaining 65 | | | | countless hours trying to figure payroll taxes and in |
| percent is reimbursed to the coverage provider | | | | preparing the different payroll tax forms. Payroll |
| through a tax credit. Employers who make COBRA | | | | Mate , from Real Business Solutions, is a complete |
| premium assistance payments for assistance eligible | | | | software for payroll, that fits the needs of most |
| individuals are allowed a credit for the payments on | | | | users regardless of their payroll needs. A free demo |
| Form 941. | | | | of the software can be downloaded by going to the |
| | | | | payroll software download page. |