Year-end will be here before you know it. So if Payroll has made any COBRA subsidy payments, you’ll want to make sure they’ve claimed credit on Form 941.
The COBRA credit must be claimed during the tax year in which it was paid.
Here are a few tips:
If the result of the credit is an overpayment, then claim it on Form 941’s line 12a the same calendar year the subsidy was paid.
That way, the overpayment can be:
- refunded to you, or
- carried over to the next quarter — even if that quarter is in the following tax year.
However, split refunds aren’t an option for Form 941 overpayments.
When it comes to reporting, put down on 941’s Line 12b the number of individuals who received the total COBRA subsidy reported on Line 12a.
Put zero on Line 12b if there is no tax credit because no subsidy was provided.
For more detailed info from the IRS, click here.
