How do I claim COBRA premium assistance credit?
Asked by: Crystal Rolfson | Last update: December 19, 2025Score: 4.9/5 (19 votes)
How do I claim COBRA on my taxes?
Are my COBRA premiums deductible? Yes they are tax deductible as a medical expense. There isn't necessarily a “COBRA Tax Deduction”. You can only deduct the amount of COBRA medical expenses on your federal income tax in excess of 7.5% of your Adjusted Gross Income and then only if you itemize deductions.
Does premium tax credit apply to COBRA?
Does my eligibility for COBRA or other continuation coverage affect my eligibility for premium tax credits or cost-sharing reductions in the Marketplace? No, just being eligible for COBRA doesn't affect your eligibility for premium tax credits or cost-sharing reductions if you enroll in a Marketplace plan.
How do I get reimbursed by COBRA?
How do I file a COBRA claim for reimbursement of benefits? Your COBRA paperwork must explain how to obtain benefits and must include written procedures for processing claims. Claims procedures must be described in the Summary Plan Description.
Is COBRA premium subsidy taxable income?
Taxability of Subsidies
The premium subsidy is not included in the individual's income. However, there is a phase-out of eligibility for the subsidy, which will increase some high-income individuals' tax liability if they receive the subsidy.
COBRA Credits
How do I claim my COBRA subsidy credit?
Request a Refund for Amounts Paid in COBRA Premiums Exceeding Federal Employment Tax Liability: The employer may claim the Credit through an employment tax refund on the applicable employment tax return, generally Form 941, Employer's Quarterly Federal Tax Return.
Does insurance subsidy count as income?
Either way, the subsidy is a tax credit, and is not considered income.
How to file claims with COBRA?
Q18: How do I file a COBRA claim for benefits? Health plan rules must explain how to obtain benefits and must include written procedures for processing claims. You should submit a claim for benefits in accordance with these rules. Claims procedures must be described in the Summary Plan Description.
What is COBRA premium assistance?
ARP COBRA Premium Assistance
Section 9501 of the ARP provides for COBRA premium assistance to help Assistance Eligible Individuals (as defined below in Q3) continue their health benefits. The premium assistance is also available for continuation coverage under certain State laws.
Are COBRA payments reported on W-2?
In general, each employer providing coverage will have to report the prorated cost on the employee's W-2. If the employee is terminated, the employer can also include the COBRA payment amounts paid by the employee after termination.
How does the premium tax credit affect my tax return?
Claiming a net PTC will lower the amount of tax you owe or increase your refund to the extent it is more than the amount of tax you owe. See the Coronavirus tax relief section on this page for information specific to tax year 2020.
Will I have to pay back my premium tax credit?
If at the end of the year you've taken more premium tax credit in advance than you're due based on your final income, you'll have to pay back the excess when you file your federal tax return. If you've taken less than you qualify for, you'll get the difference back.
Do you get tax forms for COBRA?
Depending on the kind of job-based coverage you had (including COBRA or retiree coverage), you may get one of these from your employer or insurance company: Form 1095-B, Health Coverage. Form 1095-C, Employer-Provided Health Insurance Offer and Coverage.
Where do I enter COBRA payments in TurboTax?
Enter your COBRA premiums under Medical insurance premiums.
Can you claim health insurance premiums on your taxes?
You can include health insurance premiums in your medical expense calculations. However, certain premiums are not eligible for medical expense deductions. You cannot include the following premiums in your tax deductions: Life insurance policies.
Do you get 1095 A for COBRA?
Enrollment in Health Insurance will generate tax forms. Form 1095 will be issued by your insurance carrier. This form is for informational purposes and should be kept with your tax documentation.
Can I get premium tax credit for COBRA?
The same rules that apply to people who are eligible for retiree coverage apply to people who are eligible for COBRA. Like retiree coverage, an offer of COBRA does not bar someone from being eligible for a premium tax credit. It is only a barrier to receiving the credit if the person actually enrolls.
How to deduct COBRA payments on taxes?
You can only deduct Medicare and COBRA premiums if you itemize your deductions. Plus, you're only eligible to deduct qualifying medical expenses that are more than 7.5% of your AGI for the year.
How does premium assistance work?
Premium assistance enables states to pay premiums on behalf of employees so they can purchase a product that helps to cover the costs of some of the services for which they are eligible under Medicaid. Premium Assistance does not impact the state's requirement to provide all Medicaid benefits to consumers.
Can I get a refund from COBRA?
Generally, there are no refunds when you cancel your plan early. You may contact your administrator or your past employer for specific insurance payment information.
Are COBRA premium reimbursements taxable?
No you do not have to report the COBRA assistance as income. Under Sec. 139I, the premium assistance is excluded from an individual's gross income because the employer or other payer can receive a tax credit for providing the coverage.
What is the COBRA loophole?
If you decide to enroll in COBRA health insurance, your coverage will be retroactive, meaning it will apply to any medical bills incurred during the 60-day decision period. This loophole can save you money by avoiding premium payments unless you actually need care during this time.
Can you get reimbursed for COBRA insurance?
Yes, an employer can pay all or part of a former or current employee's COBRA premiums. Employers may do so as a means to assist an employee during a merger, acquisition, layoff, termination, temporary or permanent disability, retirement, or as part of a recruitment strategy.
Why am I not eligible for premium tax credit?
To be eligible for the premium tax credit, your household income must be at least 100 percent and, for years other than 2021 and 2022, no more than 400 percent of the federal poverty line for your family size, although there are two exceptions for individuals with household income below 100 percent of the applicable ...
What does COBRA subsidy mean?
The COBRA subsidy is available for individuals who are or become qualified beneficiaries as a result of involuntary termination of employment or a reduction in hours. This may include individuals who: become eligible for COBRA during the subsidy period.