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COBRA subsidy extended

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in Small Business Tax,Small Business Tax Deduction Strategies

A new defense appropriations law extends COBRA premium subsidies.

Under the 2009 economic stimulus law, unemployed workers pay only 35% of their COBRA premiums for nine months, while their former employer pays the remaining 65%. The former employer is then reimbursed by the federal government in the form of reduced payroll taxes.

The new law extends the COBRA premium subsidy for up to 15 months and also allows it for employees who are “involuntarily terminated” in January and February of this year.

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