Credit for COBRA premium assistance payments eliminated. The COBRA premium assistance credit lines have been “Reserved for future use” on Form 941 because the first quarter of 2022 was the last quarter in which most employers may have been eligible to claim the COBRA premium assistance credit. The IRS also eliminated Worksheet 3, which was used to calculate this credit.
Section 9501 of the American Rescue Plan Act of 2021 (the ARP) provided for COBRA premium assistance in the form of a full reduction in the premium otherwise payable by certain individuals and their families who elected COBRA continuation coverage due to a loss of coverage as the result of a reduction in hours or an involuntary termination of employment (assistance eligible individuals). This COBRA premium assistance was available for periods of coverage beginning on or after April 1, 2021, through periods of coverage beginning on or before September 30, 2021. A premium payee was entitled to the COBRA premium assistance credit at the time an eligible individual elected coverage. Therefore, due to the COBRA notice and election period requirements (generally, employers had 60 days to provide notice and assistance eligible individuals had 60 days to elect coverage), the first quarter of 2022 was the last quarter in which most employers may have been eligible to claim the COBRA premium assistance credit.
Under some rare circumstances, it may be possible for a premium payee to become entitled to the COBRA premium assistance credit after the first quarter of 2022. However, in those cases, the credit must be claimed on a Form 941-X, Adjusted Employer's QUARTERLY Federal Tax Return or Claim for Refund. For more information, see the Instructions for Form 941-X.
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