The webcast archive will be available from now through June 23. It requires registration, but you don’t have to give your real personal information. You can just use tfbreader@invalid.com because I registered with that address already. If you don’t have two hours for the webcast, read the slides.

The COBRA subsidy is a subsidy paid directly to the employers. It’s not taxable to the employees.

A key requirement for receiving the COBRA subsidy is losing health benefits by "involuntary termination." A layoff is clearly involuntary termination. It gets a little fuzzy in other situations. What if the employees are in furlough? Officially they are still employees but the employer told them not to come in until further notice. According to the officials, that is involuntary termination for the purpose of COBRA premium subsidy. What if an office or plant is closing and the employees are asked to relocate but someone is unwilling to move? That counts as involuntary termination too. What if an employer asked for volunteers to retire or resign, or else be laid off, and an employee took the offer? That counts too.

You see benefits administration can get so complicated. I’m glad I don’t work in that area any more. For example a domestic partner and a child can be covered by an employee with family coverage. If an employee is laid off, the employee and the child can be eligible for the COBRA premium subsidy. The domestic partner is also eligible for COBRA, but the incremental cost for covering the domestic partner is not eligible for the subsidy.

More info: FAQs on Department of Labor website

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CCH Tax Briefing: American Recovery And Reinvestment Act Of 2009

The most significant items for individuals are:

• Making Work Pay: For 2009 and 2010, $400 per person tax credit for AGI under $75,000; phased out to $95,000 (double everything for married filing jointly).
• One-time $250 payment to Social Security and other fixed income recipients.
• AMT patch for 2009: increase AMT exemption amount from 2008 levels by $500 per person or $1,000 per couple.
• First-time homebuyer tax credit: If you never owned a home in the last three years and your AGI is under $75,000/$150,000 (phaseout to $95,000/$170,000), and you buy a primary residence between Jan. 1 and Nov. 30, 2009, you get an $8,000 refundable tax credit, which does NOT have to be repaid if you hold the home for three years. Sorry for folks who bought in 2008.
• Tax deduction for buying a new car: If your AGI is under $125k/$250k (phaseout to $135k/$260k), and you buy a new car (not used car) under $49,500 after the law is signed until the end of 2009, you get a tax deduction for the sales tax. No deduction for car loan interest. Non-itemizers are also eligible for this deduction. 
• Expanded HOPE credit for education and renamed to American Opportunity Tax Credit.

For more details, please read the CCH briefing or the full text of American Recovery and Reinvestment Act of 2009.

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[Update on Nov. 29, 2009: Worker, Homeownership, and Business Assistance Act of 2009 extended homebuyer tax credit both by time and by eligibility.]

1. $8,000 tax credit for buying a home. The new stimulus law will give up to $8,000 tax credit to first-time homebuyers. Unlike the previous $7,500 tax credit for first-time homebuyers, which has to be paid back in 15 years, this is a true tax credit as long as you hold the home for 3 years. The credit is still limited to people with an AGI under $75k (single) or $150k (married filing jointly). This tax credit is refundable, which means it’s not limited to your federal income tax liability. The qualifying purchase dates are between Jan. 1, 2009 and Nov. 30, 2009. So it’s not retroactive for purchases in 2008.

Worker, Homeownership, and Business Assistance Act of 2009 further extended homebuyer tax credit by time and income eligibility. The time for making a purchase was extended to April 30, 2010. For homes purchased on or after Nov. 7, 2009, the eligible income level is raised. The law also added a new $6,500 tax credit to existing homeowners who lived in their current home for at least five years out of the previous eight years.

Source: CCH Tax Briefing. Full text of American Recovery and Reinvestment Act of 2009 and Worker, Homeownership, and Business Assistance Act of 2009.

2. Tax deduction for buying a new car. The stimulus law also gives a tax deduction for sales tax if you buy a new car (not a used car). To qualify for the tax deductions, you must buy a new car under $49,500 between the date the law is signed and 12/31/2009. There’s also an AGI limit of $125k (single) or $250k (married filing jointly), and a phase-out range of $10k. You can take advantage of this whether you itemize your deductions or use the standard deduction.

Source: CCH Tax Briefing. Full text of American Recovery and Reinvestment Act of 2009.

Patience is greatly rewarded by our government. If you bought your home or car too soon, you get no tax break or you only get a small break. If you waited, not only you get a better price, you also get a much bigger tax break. It makes you wonder if even bigger tax breaks are coming down the road. If I were in the market for a home or a new car, I would not proceed until I know I won’t miss out on a significant tax break.

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