The Federal Stimulus bill makes several changes in the area of human resources for all employers. The “Making Work Pay” tax credit is designed to provide an immediate increase in the take home pay of employees. It provides a credit of up to $400 for individuals and $800 for married taxpayers filing joint returns. This is achieved by a reduction in tax withholdings. Employers need to use updated withholding tables available through a software provider or at the IRS website. Additional information and a link to the revised IRS tables can be found at http://www.irs.gov/newsroom/article/0,,id=204521,00.html.

Also in the Federal Stimulus is an expansion of COBRA (continuation health coverage). The bill includes a 65% subsidy toward a qualified individual’s health care coverage premium for up to nine months. Previous employees that declined coverage are also given an additional 60 days to elect to receive the subsidy. The bill includes certain timelines for eligibility; while varying cutoffs exist, a worker must have been involuntarily separated after September 1, 2008 to be eligible for this expanded benefit. More information can be found at the IRS Web Site at http://www.irs.gov/newsroom/article/0,,id=204709,00.html or at the U.S. Department of Labor at http://www.dol.gov/ebsa/cobra.html.