Yes insurance premiums are deductible under medical. You have added on to a 5 year old thread. Now it’s over 7.5% of your AGI. Do you think you will have enough to itemize this year? This year the Standard Deduction will be doubling so many people will be switching to the Standard Deduction. And there is a max 10,000 limit (5,000 MFS) of property tax and state taxes "SALT". FAQ on 2018 changes <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/4482394-how-will-tax-reform-affect-my-2018-federal-tax-return">htt...> For 2018 the standard deduction amounts are: The Internal Revenue Service (IRS) has released two pieces of guidance, Notice 2021-31 and Notice 2021-46 (the Guidance), discussing the COBRA subsidy provisions of the American Rescue Plan Act (ARP). See our initial alert on the substantive aspects of the Guidance, “IRS Releases Guidance on COBRA Subsidies,” here. Under the Guidance, the IRS provides much-needed details on how multiemployer plans, employers with self-insured plans, or insurers (Payees), can claim the COBRA subsidy tax credit (the Credit) to offset mandatory payment of fully subsidized premiums for certain COBRA qualified beneficiaries. Notice 2021-46 also provides helpful information to identify the common law employer for this purpose. This updated Guidance is helpful in light of the upcoming July 31, 2021 deadline for filing Form 941 for Q2. The Guidance provides three methods for claiming the Credit for employers paying the premium or reimbursing employees for premiums for coverage periods April 1 through September 30:
As with method two, an advance cannot be requested for a period of coverage that has not yet started; however, Form 7200 can be filed at the end of the payroll period in which the employer became entitled to the Credit. In addition, note that Form 7200 must be submitted before the earlier of (1) the date the Form 941 for the applicable quarter is filed, or (2) the last day of the month following that quarter. The employer must also report the advance payment received and claim the tax credit on Form 941. Income Tax Consequences: Finally, note that the value of the Credit is included in gross income to the employer. However, an employer generally could also claim a deduction for this amount. The amount of the COBRA premium assistance is not taxable to the COBRA qualified beneficiary in receipt of the benefit. Winston Takeaway: Given the potential administrative challenges with accurately calculating the exact amount of COBRA premium tax subsidy and employment tax liabilities, most employers will consider simply filing a Form 941 to claim the COBRA Premium tax credit. Form 941 and Instructions have been updated for this purpose. Employers for whom waiting for reimbursement poses a hardship should be careful to accurately assess employment tax liability for each quarter and closely follow the timing rules on when employment taxes can be withheld and the advance claimed. Please contact a member of the Winston & Strawn Employee Benefits and Executive Compensation team for further information. Can I deduct COBRA payments?You can deduct the cost of COBRA health insurance on your federal income taxes. But as with most types of health insurance, COBRA premiums are considered a medical expense and can only be deducted if you itemize your deductions and your medical expenses are greater than 7.5% of your AGI for the taxable year.
Is COBRA claimed on taxes?The amount of the COBRA premium assistance is not taxable to the COBRA qualified beneficiary in receipt of the benefit.
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