COBRA Credit for Q4 2021 Form 941

The American Rescue Plan Act (ARPA) allows for a COBRA Premium Subsidy, which provides a 100% subsidy to the employer for the cost of COBRA continuation coverage for eligible employees. The subsidy applies for up to six months of coverage from April 2021 through September 2021 (provided employees are within their maximum COBRA period and not eligible for coverage elsewhere). For subject plans, the employer is required to pay the COBRA premium, and is eligible for a payroll tax credit reimbursement on the quarterly 941.


Can the subsidy last beyond September 30, 2021?
The IRS clarified in Notice 2021-31 that for individuals still eligible for the premium subsidy on September 30, the subsidy will not necessarily end on that date. Instead, the subsidy continues until the end of the last “period of coverage” beginning on or before September 30.  A “period of coverage” means a month or shorter period regarding premiums that would normally be charged. For example, if premiums are usually assessed on a bi-weekly period basis, including the period from September 26 to October 16, the subsidy would not be prorated to September 30th but would instead cover the entire period ending on October 16.

This form must be completed for each Federal EIN that you are requesting calculations for.

If your company is eligible for a credit in 4th quarter 2021 (for October, November, and December), please fill out the below by Tuesday, January 4, 2022 and PayNW will apply the credit to your quarterly 941. Forms received after January 4th are subject to a $150.00 late processing fee to apply the credit.

If known
This applies to Q4 2021(Required)