W-2 Reporting of Group Health Costs
The Internal Revenue Service (IRS) has released Notice 2011-28 providing interim guidance for employers on reporting the cost of employee health plan coverage on Form W-2.
The Affordable Care Act initially required employers to report the cost of coverage under an employer sponsored group health plan starting in tax year 2011. To give employers more time to update their payroll systems, the IRS last fall made this requirement optional for 2011. Notice 2011-28 provides further relief for smaller employers filing fewer than 250 W-2 forms, making the reporting voluntary for at least 2012 and until further guidance is issued.
The notice includes information on how to report, what coverage to include, and how to determine the cost of the coverage. The reporting is for information only; the amounts reported are not included in taxable wages and are not subject to new taxes.
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