Cobra Extended & Medical Residents' FICA

[gkaiseril]

The President signed the Temporary Extension Act of 2010 (HR 4691) into law on Mar. 2, 2010. The new law extends eligibility for increased unemployment benefits to individuals who become unemployed on or before April 5, 2010. The new law also extends and expands the COBRA premium subsidy for individuals who have been involuntarily terminated from their jobs. http://hr.cch.com/news/payroll/031010a.asp

Some Medical Residents and Medical Interns exemption to FICA taxes has been finalized, http://www.irs.gov/pub/irs-irbs/irb05-02.pdf .

[AZ-Tax]

Is this Cobra subsidy going to be taxable to the taxpayer?

Does anyone know if this subsidy is going to be taxable to the taxpayer receiving the subsidy and if so will the tax portion be based on taxpayers AGI?

[Peachie]

I don't believe

Does anyone know if this subsidy is going to be taxable to the taxpayer receiving the subsidy and if so will the tax portion be based on taxpayers AGI?

COBRA is taxable to the taxpayer. The employer gets a credit through his payroll taxes, I believe, but it's not a taxable event for the tapayer. The government is paying the 65%, not the t/p or the employer. This is how I see it. Someone will correct me if we differ.