House Approves Stimulus Bill That Could Mean New Withholding Tables and COBRA Discount Funded by Payroll Taxes.

On January 28, the U.S. House of Representatives voted 244-188 to approve H.R. 1, known as the "American Recovery and Reinvestment Act of 2009." The centerpiece of the bill is a $500 individual "Making Work Pay" income tax credit ($1,000 for joint filers) that would be distributed via reduced withholding. The bill also provides that eligible individuals would be entitled to a subsidy of 65% of the premium for COBRA continuation coverage. To the extent that an employer to which premiums are payable has liability for income tax withholding from wages or FICA taxes with respect to its employees, the employer would be reimbursed by treating the reimbursable amount as a credit against its liability for these payroll taxes.