Reporting Requirements for 2012 W-2s
The Affordable Care Act, which became law on March 23, 2010, included a provision for employers to begin reporting the cost of coverage under an employer-sponsored group health plan on Form W-2. The cost reported on employees’ Forms W-2 is designed to be for the employees’ information only and does not mean changes in the taxability of employer-provided health insurance coverage.
Initially the provision was mandated for 2011 W-2s, but IRS Notice 2010-69 issued November 1, 2010, made the reporting of that information optional for 2011 and required for 2012 W-2s issued in January 2013.
A subsequent notice issued April 18, 2011, Notice 2011-28, provided additional guidance on the reporting requirement and relief from 2012 reporting for certain small employers and certain types of employer-sponsored coverage. Employers filing fewer than 250 W-2s for the previous calendar year will not be subject to the reporting requirement. If a company files fewer than 250 W-2s for calendar year 2011 (reported to the Social Security Administration in January 2012), that company will not be required to report health insurance coverage costs on calendar year 2012 W-2s (reported to the Social Security Administration in January 2013).
The total cost of employer-sponsored health coverage is to be reported under the law regardless of whether the coverage is paid for by the employee or the employer. Certain types of coverage are not included in the reporting of employer-sponsored coverage, such as liability insurance, workers’ compensation insurance, accident only or disability income insurance and auto medical payment insurance.
Employers who plan to voluntarily report the cost of employer-sponsored health coverage on 2011 W-2s can include it in box 12 of Form W-2 with the code DD and reference the IRS’ interim guidance documents for additional details.
The IRS has made available helpful tools for employers to learn more about health care coverage reporting on Form W-2:
- October 31, 2011, webinar
- IR-2011-28 Interim Guidance on Informational Reporting to Employees of the Cost of Their Group Health Insurance Coverage
- Frequently Asked Questions
The material contained on this page is for informational purposes only and is current as of the date of publication. CompuPay is not a legal, tax or financial adviser and makes no claims as such. For tax, financial or legal advice, please seek a professional.